SOCIO-ECONOMIC OFFENCES

BALLB-FIMT 2017

UNIT-1: HOARDING AND PROFITEERING:

a. Laws relating to Maintenance of Essential Supplies:

In order to prevent unethical trade practices like hoarding and blackmarketing etc., the
Prevention of Blackmarketing of Supplies of Essential Commodities, Act, 1980 is being
implemented by the State Governments to detain persons whose activities are found to
be prejudicial to the maintenance of supplies of commodities essential to the
community.

3. Power to make orders detaining certain persons.

(1) The Central Government or a State Government or any officer of the Central
Government, not below the rank of a Joint Secretary to that Government specially
empowered for the purposes of this section by that Government, or any officer of a
State Government, not below the rank of a Secretary to that Government specially
empowered for the purposes of this section by that Government, may, if satisfied, with
respect to any person that with a view to preventing him from acting in any manner
prejudicial to the maintenance of supplies of the commodities essential to the
community it is necessary so to do, make an order directing that such person be
detained .

Exp1anation. - For the purposes of this sub-section, the expression 'acting in any
manner prejudicial to the maintenance of supplies of commodities essential to the
community' means - (a) committing or instigating any person to commit any offence
punishable under the Essential Commodities Act, 1955 (10 of 1955) or under any other
law for the time being in force relating to the control of the production, supply or
distribution of, or trade and commerce in, any commodity essential to the community; or
(b) dealing in any commodity

(i) which is an essential commodity as defined in the Essential Commodities Act, 1955
(10 of 1955), or (ii)with respect to which provisions have been made in any such other
law as is referred to in clause (a), with a view to making gain in any manner which may
directly or indirectly defeat or tend to defeat the provisions of that Act or other law
aforesaid. As per Section 2 of Essential Commodities Act, 1955, "essential commodity"
means any of the following Classes of commodities: (i) . cattle fodder, including oil-
cakes and other concentrates;. (ij) coal, including coke and other derivatives; (iii)
component parts and accessories of automobiles; (iv) cotton and-~oollen textiles; 01'(/)
Drugs explanation-In this sub-clause "drugs" has the meaning assigned to it in , clause
(b) of Section 3 of the Drugs and Cosmetics Act, 1940; (\, foodstuffs, including edible
oil-seeds and oils; (ri) iron and steel, including manufactured products of iron and steel;
(J'iij paper, including newsprint, paperboard -and straw board; (I'iii) perr(~leum and
petroleum products; Ox) raw cotton, whether ginned or unginn::d and cotton se~d; (x)
raw jutt:, (xi) any other class of commodity which the Central Government may, by
notified order, declare to be an essential commodity for the purposes of this Act, being a
commodity with respect to which Parliament has power to make laws by virtue of Entry
33, in List III in the Seventh Schedule;. to the Constitution;

(2) Any of the following officers, namely (a)District Magistrates; (b)Commissioners of

Police, wherever they have been appointed, may also, if satisfied as provided in sub-
section (1), exercise the powers conferred by the said sub-section.

(3) When any order is made under this section by an officer mentioned in subsection
(2), he shall forthwith report the fact to the State Government to which he is subordinate
together with the grounds on which the order has been made and such other particulars
as in his opinion have a bearing on the matter, and no such order shall remain in force
for more than twelve days after the making thereof unless in the meantime it has been
approved by the State Government: Provided that where under section 8 the grounds of
detention are communicated by the authority making the order after five days but not
later than ten days from the date of detention, this sub-section shall apply subject to the
modification that for the words 'twelve days', the words 'fifteen days' shall be
substituted.

(4) When any order is made or approved by the State Government under this section or
when any order is made under this section by an officer of the State Government not
below the rank of Secretary to that Government specially empowered under sub-section
(1), the State Government shall, within seven days, report the fact to the Central
Government together with the grounds on which the order has been made and such
other particulars as, in the opinion of the State Government, have a bearing on the
necessity for the order.

4. Execution of detention orders. - A detention order may be executed at any place in

India in the manner provided for the execution of warrants of arrest under the Code of
Criminal Procedure, 1973 (2 of 1974).

5. Power to regulate place and conditions of detention. - Every person in respect of

whom a detention order has been made shall be liable (a)to be detained in such place
and under such conditions, including conditions as to maintenance, discipline and
punishment for breaches of discipline, as the appropriate Government may, by general
or special order, specify; and (b)to be removed from one place of detention to another
place of detention, whether within the same State or in another State, by order of the
appropriate Government: Provided that no order shall be made by a State Government
under clause (b) for the removal of a person from one State to another State except with
the consent of the Government of that other State.

6. Detention orders not to be invalid or inoperative on certain grounds-- No detention

order shall be invalid or inoperative merely by reason (a) that the person to be
detained thereunder is outside the limits of the territorial jurisdiction of the Government
or officer making the order, or (b)that the place of detention of such person is outside
the said limits.

7. Powers in relation to absconding persons. - (1) If the appropriate Government or an

officer mentioned in sub-section (2) of section 3, as the case may be has reason to
believe that a person in respect of whom a detention order has been made has
absconded or is concealing himself so that the order cannot be executed, that
Government or officer may (a)make a report in writing of the fact to a Metropolitan
Magistrate or a Judicial Magistrate of the First Class having jurisdiction in the place
where the said person ordinarily resides; and thereupon the provisions of section 82,
83, 84 and 85 of the Code of Criminal Procedure, 1973 (2 of 1974), shall apply in
respect of the said person and his property as if the order directing that he be detained
were a warrant issued by the Magistrate; (b)by order notified in the Official Gazette
direct the said person to appear before such officer, at such place and within such
period as may be specified in the order; and if the said person fails to comply with such
direction he shall, unless he proves that it was not possible for him to comply therewith
and that he had, within the period specified in the order, informed the officer mentioned
in the order, of the reason which rendered compliance therewith impossible and of his
whereabouts, be punishable with imprisonment for a term which may extend to one year
or with fine or with both. (2) Notwithstanding anything contained in the Code of Criminal
Procedure, l973 (2 of 1974), every offence under clause (b) of sub-section (1) shall be
cognizable.

8. Grounds of order of detention to be disclosed to person affected by the order. - (1)

When a person is detained in pursuance of a detention order, the authority making the
order shall, as soon as may be, but ordinarily not later than five days and in exceptional
circumstances and for reasons to be recorded in writing, not later than ten days from the
date of detention, communicate to him the grounds on which the order has been made
and shall afford him the earliest opportunity of making a representation against the
order to the appropriate Government. (2) Nothing in sub-section tl) shall require the
authority to disclose facts which it considers to be against the public interest to disclose.

9. Constitution of Advisory Boards. - (1) The Central Government and each State
Government shall, whenever necessary, constitute one or more Advisory Boards for the
purposes of this Act. (2) Every such Board shall consist of three persons who are, or
have been or are qualified to be appointed as, Judges of a High Court, and such
persons shall be appointed by the appropriate Government. (3) The appropriate
Government shall appoint one of the members of the Advisory Board who is, or has
been, a Judge of a High Court to be its Chairman, and in the case of a Union Territory,
the appointment to the Advisory Board of any person who is a Judge of the High Court
of a State shall be with the previous approval of the State Government concerned.

10. Reference to Advisory Boards. - Save as otherwise expressly provided in this Act, in
every case where a detention order has been made under this Act, the appropriate
Government shall, within three weeks from the date of detention of a person under the
order, place before the Advisory Board constituted by it under section 9, the grounds on
which the order has been made and the representation, if any, made by the person
affected by the order and in case where the order has been made by an officer referred
to in sub-section (2) of section 3, also the report by such officer under sub-section (3), of
that section.

11. Procedure of Advisory Boards. - (1) The Advisory Board shall, after considering the
materials placed before it and, after calling for such further information as it may deem
necessary from the appropriate Government or from any person called for the purpose
through the appropriate Government or from the person concerned, and if, in any
particular case, it considers it essential so to do or if the person concerned desires to be
heard, after hearing him in person, submit its report to the appropriate Government
within seven weeks from the date of detention of the person concerned. (2) The report
of Advisory Board shall specify in separate part thereof the opinion of the Advisory
Board as to whether or not there is sufficient cause for the detention of the person
concerned. (3) When there is a difference of opinion among the members forming the
Advisory Board, the opinion of the majority of such members shall be deemed to be the
opinion of the Board. (4) Nothing in this section shall entitle any person against whom a
detention order has been made to appear by any legal practitioner in any matter
connected with the reference to the Advisory Board, and the proceedings of the
Advisory Board, and its report, excepting that part of the report in which the opinion of
the Advisory Board is specified, shall be confidential.

12. Action upon the report of Advisory Board. - (1) In any case where the Advisory
Board has reported that there is, in its opinion, sufficient cause for the detention of a
person, the appropriate Government may confirm the detention order and continue the
detention of the person concerned for such period as it thinks fit. (2) In any case where
the Advisory Board has reported that there is, in its opinion, no sufficient cause for the
detention of the person concerned, the appropriate Government shall revoke the
detention order and cause the person to be released forthwith.
13. Maximum period of detention. - (1) The maximum period for which any person may
be detained in pursuance of any detention order which has been confirmed under
section 12, shall be six months from the date of detention: Provided that nothing
contained in this section shall affect the power of the appropriate Government to revoke
or modify the detention order at any earlier time.

14. Revocation of detention orders. - (1) Without prejudice to the provisions of section
21 of the General Clauses Act, 1897 (10 of 1897), a detention order may, at any time,
be revoked or modified (a)notwithstanding that the order has been made by an officer of
the State Government, by that State Government or by the Central Government;
(b)notwithstanding that the order has been made by an officer of the Central
Government or by a State Government, by the Central Government. (2) The revocation
or expiry of a detention order shall not bar the making of a fresh detention order under
section 3 against the same person in any case where fresh facts have arisen after the
date of revocation or expiry on which the Central Government or a State Government or
an officer, as the case may be, is satisfied that such an order should be made.

15. Temporary release of persons detained. - (1) The appropriate Government may, at
any time, direct that any person detained in pursuance of a detention order may be
released for any specified period either without conditions or upon such conditions
specified in the direction as the person accepts, and may, at any time, cancel his
release. (2) In directing the release of any person under sub-section (1), the appropriate
Government may require him to enter into a bond with or without sureties for the due
observance of the conditions specified in the direction. (3) Any person released under
sub-section (1) shall surrender himself at the time and place, and to the authority,
specified in the order directing his release or canceling his release, as the case may be.
(4) If any person fails without sufficient cause to surrender himself in the manner
specified in sub-section (3), he shall be punishable with imprisonment for a term which
may extend to two years or with fine, or with both. (5) If any person released under sub-
section (1) fails to fulfil any of the conditions imposed upon him under the said sub-
section or in the bond entered into by him, the bond shall be declared to be forfeited and
any person bound thereby shall be liable to pay the penalty thereof.

16. Protection of action taken in good faith. - No suit or other legal proceeding shall lie
against the Central Government or a State Government, and no suit, prosecution or
other legal proceeding shall lie against any person, for any thing in good faith done or
intended to be done in pursuance of this Act.

CASE LAWS

1. Surubha Govubhai Jadeja Vs. State of Gujarat- 2000CriLJ1224- The petitioner

challenged order of preventive detention made by state government
 under section 3 - petitioner and owner of petrol pump alleged to have used
controlled kerosene for adulteration of diesel with a view to make personal gain -
activities of owner of business and petitioner defeat provisions of essential
commodities act - supply of adulterated article/commodity not beyond scope
of section 3 - held, order of preventive detention proper.
The prevention of blackmarketing & maintenance of supplies of essential co
mmodities act, 1980- the petitioner herein is a manager in jay Ambe petroleum
services, situated at kalol, district-mehsana. Upon inspection, the stock of diesel
maintained by the petrol pump was found to be adulterated. Upon analysis of
such adulterated diesel, it was found to be adulterated by controlled kerosene
which is supposed to be distributed amongst the domestic consumers, at a
subsidized rate. The said illegal activity is alleged to have been committed by the
owner jayantilal d. shah.
2. Mrs. Hamida Sarfaraz Qureishi Vs. M.S. Kasbekar and ors. AIR1981SC459
This is a petition for issue of a writ of habeas corpus filed by the wife of the
detenu, Sarfaraz Maqbool Qureishi who has been detained under Section 3 of
the Prevention of Blackmarketing and Maintenance of Supplies of Essential
Commodities Act, 1980 The order was issued by the Commissioner of Police,
Bombay on May 28, 1980. It was served on the detenu on May 29, 1980 when,
according to the averments in the writ petition, he was an indoor patient in the St.
George Hospital, Lucknow, struggling for his life, due to a massive heart attack.
The grounds of detention were also supplied to him on the same day. The detenu
is a dealer in kerosene.
Mr. Jethmalani, appearing for the petitioner, has canvassed five points before us.
The first point is that a representation dated June 27, 1980 was addressed to the
detaining authority, Commissioner of Police, Bombay, but the latter refused to
consider the same and this amounts to an infringement of the constitutional
obligation implied under Article 22(5) of the Constitution as well as Section 4 of
the Act. The second point urged by the learned Counsel is that the detenu had in
his representation, expressed a desire that he be heard in person by the
Advisory Board; that this right was denied to him, in as much as on the day on
which the Advisory Board was to hold its meeting, a police officer at about 1 p.m.
came to the Prince Ali Khan Hospital, and informed the detenu's wife that the
detenu could appear before the Advisory Board in the afternoon that the detenu
was then in the Intensive Care Unit of the Hospital struggling to survive from a
massive heart attack, and, as such, incapable of moving out and appearing
before the Board. It is stressed that the detenu was in such a disabled condition
that he could not even communicate with anybody.
Clause (4)(a) of Article 22 of the Constitution mandates that no law providing for
preventive detention shall authorise the detention of a person for a longer period
than three months, unless an Advisory Board consisting of persons possessing
the qualifications specified therein, has reported before the expiry of the said
period of three months that there is in its opinion sufficient cause for such
detention. Clause (5) of the Article requires that the grounds of detention shall be
communicated to the detenu 'as soon as may be' and he shall be afforded 'the
earliest opportunity' of making a representation against the order of his detention.
Clause (7)(c) of the Article empowers Parliament to prescribe by law the
procedure to be followed by an Advisory Board in an inquiry under Sub-clause
(a) of Clause (4). In exercise of its power under Entry 3 of List III of Schedule VII
Parliament has enacted the PREBLACT (Act 7 of 1980). In compliance with the
mandate in Clause 4(a) of Article 22, Section 9 of the Act provides for the
Constitution of Advisory Board and matters connected therewith. In accordance
with Clause 7(C) of Article 22, Section 11 of the Act prescribes the procedure of
Advisory Boards. Sub-section (1) of the Section, inter alia, provides that if in any
particular case, the person concerned (detenu) desires to be heard in person, the
Advisory Board shall, after hearing in person, submit its report to the appropriate
Government within seven weeks from the date of detention.
Section 12(2) of the Act provides that in any case where the Advisory Board has
reported that there is in its opinion no sufficient cause for the detention, the
appropriate Government shall revoke the detention order and cause the detenu
to be released forthwith.
In the instant case, the detenu had through his representation dated June
27, 1980 to the detaining authority, expressed a desire to appear before the
Advisory Board and be heard in person. Under Section 11(1) of the PKEBLACT
therefore, the authority concerned was peremptorily required to afford to the
detenu a proper opportunity to be heard in person by the Advisory Board. But in
the instant case, such an opportunity was not given to the detenu, despite
request. Firstly, no reasonable notice about the date of meeting of the Advisory
Board was given to the detenu. It was only about one or two hours before the
scheduled time of the meeting of the Advisory Board that a police officer went to
the Hospital in which the detenu was confined, to inform about the meeting of the
Board. Even that information was given only to the wife of the detenu for further
transmission to the detenu who was then precariously ill and disabled from doing
anything. Thus, the so-called opportunity of being heard in person by the
Advisory Board, was a farce, and amounted to a negation of the right conferred
on him under Section 11(1) of the Act.
Mr. Mridul appearing for the Respondent contended that the detenu should have
asked for extension of the date of hearing and for a short adjournment of hearing
by the Advisory Board, but he made no such request. The argument is devoid of
merit. The detenu was in the Intensive Care Unit of the Hospital under heart
attack and was in the circumstances, physically incapable of doing anything of
the kind.
These, then are the reasons for our Order dated September 10, 1980, whereby
we had allowed the writ petition and directed the release of the detenu.
 3. Nali Balaiah Vs. Government of Andhra Pradesh and ors. 1992CriLJ423
On 23rd April, 1991, the Collector and District Magistrate, Kurnool passed an
order in exercise of his powers under sub-sec. (2)(a) of S. 3 read with S. 3(1)(a)
of the Prevention of Blackmarketing and Maintenance of Supplies of Essential
Commodities Act, 1980 directing detention of one Nali Balaiah, a businessman of
Veldurthi village, Kurnool District, for a period of six months, after being satisfied
that the detention was necessary in order to prevent the said Balaiah from further
acting in any manner prejudicial to the maintenance of supplies of commodities
essential to the community. The detention order recites that the detaining
authority received credible information that Balaiah taking advantage of the Gulf
crisis :........ indulged in clandestine trade by hoarding huge stocks of Groundnut
and Groundnut seed in authorised and unauthorised godowns of Sri
Venkateswara Swamy Shelling and Oils Mills, Veldurthi, without maintaining true
and correct accounts and exceeding the storage limit of 500 quintals of
groundnut pod and indulging in speculative business in a manner prejudicial to
the maintenance and easy availability of supplies of groundnut pods and seeds in
the market by causing scarcity of the said commodity, resulting in price rise of
groundnut oil, thereby causing great hardship to the public, with a view to making
pecuniary gain ......'and thus, contravened conditions 2(b), 3(i) and 7(1) of the
licence issued under the A.P. Scheduled Commodities Dealers (Licensing and
Distribution) Order, 1982 and clause 4 of Pulses, Edible Oil Seeds, and Oils
(Storage Control) Order 1979.
The dealer Balaiah was taken into custody on 10-5-91 and lodged in the District Jail,
Secunderabad. On the same day the grounds of detention were served on him. The
detenu made a representation to the State Government on 28-5-91 and the same was
rejected on 19-6-1991. The Advisory Board constituted under the Act VII of 1980, after
considering the material placed before it was of the opinion that there was sufficient
cause for the detention.
The wife of the detenu filed this writ petition seeking a writ of Habeas Corpus for release
of the detenu after setting aside the order of Detention passed by the second
respondent - Collector and District Magistrate, Kurnool.
The detaining authority, therefore, expressed the view that the detenu failed to maintain
the true and correct accounts for groundnut seeds and pods and thereby contravened
condition 3(1) of the licence issued under the Andhra Pradesh Scheduled Commodities
Dealers (Licensing and Distribution) Order, 1982. By storing 560 quintals of groundnut
pod and 293.60 quintals of groundnut seed in godowns Nos. 4 to 6 and 14 and 17
unauthorisedly the detenu and his wife contravened condition No. 2(b) of the licence
issued under the above Control Order. The detenu further contravened cl. 4 of Pulses,
Edible Oilseeds and Edible Oils (Storage Control) Order, 1979 by storing 2225 quintals
of groundnut pod and 464 quintals of groundnut seed in excess of the storage limit of
500 quintals. By entering into transaction involving purchase, sale or storage for sale of
edible oil seeds in a speculative manner prejudicial to the maintenance and easy
availability of edible oils and oil seeds in the market, it is stated in the grounds of
detention that the detenu has contravened condition No. 7(1) of the Licence under the
Andhra Pradesh Scheduled Commodities Dealers (Licensing and Distribution) Order,
1982. The further recitals which need to be noticed in the grounds of detention are that
the detenu along with his co-brother Naganna, taking advantage of the Gulf crisis
indulged in clandestine trade by hoarding huge stocks of ground pods and seeds
beyond permissible limits unauthorisedly and caused artificial scarcity of the said
commodity in the market leading to abnormal rise in prices of edible oils and seeds, with
a view to make pecuniary gain and thereby caused hardship to the public. The detaining
authority felt that :
'Launching prosecution will not have the immediate desired effect of preventing you
from further acting in future in a manner prejudicial to the maintenance of supplies of
essential commodities to the community, as its culmination takes considerably long
time.'
2225 quintals of groundnut pod and 464 quintals of groundnut seed were alleged to
have been found in the godowns belonging to the detenu and no accounts were
forthcoming as to the sources of the stock. The speculative nature of the transaction is
clearly apparent
'The essential concept of preventive detention is that the detention of a person is not to
punish him for something he has done but to prevent him from doing it. The basis of
detention is the satisfaction of the executive of a reasonable probability of the likelihood
of the detenu acting in a manner similar to his past acts and preventing him by detention
from doing the same.
'The power of preventive detention is quantitatively different from punitive detention. The
power of preventive detention is a precautionary power exercised in a reasonable
anticipation. It may or may not relate to an offence. It is not a parallel proceeding. It
does not overlap with prosecution even if it relies on certain facts for which, prosecution
may be launched or may have been launched. An order of preventive detention may be
made before or during prosecution. An order of preventive detention may be made with
or without prosecution and in anticipation or after discharge or even acquittal. The
pendency of prosecution is no bar to an order of preventive detention. An order of
preventive detention is also not a bar to prosecution.'
'The principles emerging from a review of the above case may be summarised in the
following way : The ordinary criminal process is not to be circumvented or short-circuted
by ready resort to preventive detention. But, the possibility of launching a criminal
prosecution is not an absolute bar to an order of detention. Nor is it correct to say that if
such possibility is not present to the mind of the detaining authority the order of
detention is necessarily bad. However, the failure of the detaining authority to consider
the possibility of launching a criminal prosecution may, in circumstances of a case, lead
to the conclusion that the detaining authority had not applied its mind to the vital
question whether it was necessary to make an order of preventive detention. Where an
express allegation is made that the order of detention was issued in a mechanical
fashion without keeping present to its mind the question whether it was necessary to
make such an order when an ordinary criminal prosecution could well serve the
purpose, the detaining authority must satisfy the Court that that question too was borne
in mind before the order of detention was made. If the detaining authority fails to satisfy
the Court that the detaining authority so bore the question in mind the Court would be
justified in drawing the inference that there was no application of the mind by the
detaining authority to the vital question whether it was necessary to preventively detain
the detenu.'
'It is, therefore, clear that every failure to furnish copy of a document to which reference
is made in the grounds of detention is not an infringement of Art. 22(5), fatal to the order
of detention. It is only failure to furnish copies of such documents as were relied upon
by the detaining authority, making it difficult for the detenu to make an effective
representation, that amounts to a violation of the Fundamental Rights guaranteed by
Article 22(5). In our view it is unnecessary to furnish copies of documents to which
casual or passing reference may be made in the course of narration of facts and which
are not relied upon by the detaining authority in making the order of detention.'
'When any person is detained in pursuance of an order made under any law providing
for preventive detention, the authority making the order shall, as soon as may be,
communicate to such person the grounds on which the order has been made and shall
afford him the earliest opportunity of making a representation against the order.'
For these reasons the writ petition fails and accordingly it is dismissed. No costs
THE ESSENTIAL COMMODITIES ACT, 1955
STATEMENT OF OBJECTS AND REASONS OF THE ACT: Under Article 369 of the
Constitution, Parliament had power during a period of five years from the
commencement thereof to make laws with respect to trade and commerce in, and the
production, supply and distribution of certain essential commodities. The life of the
Essential Supplies (Temporary Powers) Act, 1946 was therefore limited to the 26th
January, 1955. The essential commodities to which that Act applied fell into two broad
categories, viz.: (a) coal, textile, iron and steel, paper, etc., which are products of
industries under Union control, and (b) foodstuffs, cattle fodder, etc., which are not
products of such industries. As public interest required that Centre should continue to
have even after the 26th January, 1955, the same legislative powers as it had under
Article 369 of the Constitution, a Bill providing for the necessary amendment of Entry 33
of List 3 in the Seventh Schedule to the Constitution was passed by both Houses of
Parliament in September last year. This amendment has now become law, having been
ratified by the requisite number of States. The Constitution (Third Amendment) Act,
however, had not become law when the Essential Supplies (Temporary Powers) Act,
1946 expired, and therefor an Ordinance was promulgated to take effect on the 26th
day of January, 1955, which provided for the regulation of trade and commerce in, and
the production, supply and distribution of commodities which fell within the first category
referred to in the preceding paragraph. Under Entry 42 of the Union List, Parliament has
power to regulate inter-State trade and commerce in all commodities and the Ordinance
also provided for such regulation in section 4, thereof but the application of that section
was limited in the first instance to wheat, raw cotton and sugar-cane. Pending the
passing of a Central law providing for control in respect of all essential commodities now
falling within Entry 33 of the Concurrent List, certain State Governments have
promulgated Ordinance or taken legal action open to them for continuing controls in
respect of such commodities as could not be included in the Central Ordinance. The
present Bill seeks to replace the Central Ordinance and at the same time includes within
the definition of "essential commodities" those commodities which had to be left out by
reason of lack of legislative power. To a very large extent, the Bill follows the provisions
contained in the Essential Supplies (Temporary Powers) Act, 1946, but the penalty
clause has been simplified and a few other provisions have been omitted as
unnecessary. ACT 10 OF 1955 The Essential Commodities Bill having been passed by
both the Houses of Parliament received the assent of the President on 1st April, 1955. It
came on the Statute Book as
THE ESSENTIAL COMMODITIES ACT, 1955 An Act to provide, in the interests of the
general public, for the control of the production, supply and distribution of, and trade and
commerce, in certain commodities.
2. Definitions. -In this Act, unless the context otherwise requires,
(ia)"Collector" includes an Additional Collector and such Other officer, not below the
rank of Sub-Divisional Officer, as may be authorised by the Collector to perform the
functions and exercise the powers of the Collector under this Act;
(a) "Essential commodity" means any of the following classes of commodities: (i) Cattle
fodder, including oilcakes and other concentrates; (ii) Coal including coke and other
derivatives; (iii)Component parts and accessories of automobiles; (iv)Cotton and woolen
textiles; (iv-a) Drugs. Explanation. In this Sub-clause, "drug" has the meaning
assigned to it in Clause (b) of Section 3 of the Drugs and Cosmetics Act. 1940 (23 of
1940)1 (v) Foodstuffs, including edible oilseeds and oils; (vi) Iron and steel, including
manufactured products of iron and steel; (vii) Paper, including newsprint, paper board
and straw board; (viii) Petroleum and petroleum products; (ix) Raw cotton, whether
ginned or unginned, and cotton seed; (x) Raw jute; (xi) Any other class of commodity
which the Central Government may, by notified order, declare to be an essential
commodity for the purposes of this Act, being a commodity with respect to which
Parliament has power to make laws by virtue of Entry 33 in List Ill in the Seventh
Schedule to the Constitution:
(b) "Food-crops" include crops of sugarcane;
(c) "Notified order" means an order notified in the Official Gazette;
(cc)"Order" includes a direction issued thereunder;
(d)"State Government", in relation to a Union territory, means the administrator thereof;
(e) "Sugar" means- (i) Any form of sugar containing more than ninety per cent, of
sucrose, including sugar candy; (ii) Khandsari sugar or bura sugar or crushed sugar or
any sugar in crystalline or powdered form; or (iii) Sugar in process in vacuum-pan sugar
factory or raw sugar produced therein.
(f) Words and expressions used but not defined in this Act and defined in the Code shall
have the meanings respectively assigned to them in that Code.
NOTES
Tea is not a foodstuff. It is a stimulant. Even in a wider sense "food-stuffs" will not
include tea as tea either in the form of leaves or in the form of beverage does not go
into the preparation of food proper to make it more palatable and digestible. Tea leaves
are not eaten. Tea is a beverage produced by steeping tea leaves or buds of the tea
plants in boiled water. Such "tea" is consumed hot or cold for its flavour, taste and its
quality as a stimulant. The stimulating effect is caused by the presence of caffeine
therein. "Tea" neither nourishes the body nor sustains or promotes its growth. It does
not have a nutritional value. It does not help formation of enzymes not does it enable
anabolism. Tea or its beverage do not go into the preparation of any foodstuff. In
common parlance, anyone who has taken tea would not say that he has taken or eaten
food. Thus, "tea" is not "food". It is not understood as "food" or "foodstuff' either in
common parlance or by the opinion of lexicographers. (SC) Harrisons Malayalam v.
Union of India 2004 (1) KLT SN.25 : 2004 (1) SCC 256 : AIR 2004 SC 218.
The word "oil" used in regard to foodstuff pertains to only edible type of oils and not oils
like kerosine. Tulsidas Modi v. State of Orissa 1987 CrLJ 664. Legislative power is
conferred on parliament and on the State with respect to the production of any product
of the coir industry. A process is involved, certainly in the retting of coconut husks which
is regulated by the Act. Even now husks may well be regarded as products of the coir
industry, in large and liberal sense, and that a legislation "with respect to" the production
even of raw husks, may well relate to the products of the coir industry and therefore fall
within Entry 33 of List 111. There is legislative competence under Entry 33 of List 111 to
legislate with respect to the production of husks, raw and retted. The levy of licence fee
for retting husk is legal. Special Officer for Coir vYusuf ILR 1976 (1) Ker.287.
Coconut husks cannot be considered as the product of any industry. Hence, Coir
Retting (Licensing) order, 1966 issued by the Central Government is without jurisdiction.
Mohammed yusuf v. Union of India -1972 KLT 238: 1972 KU J 311. (Reversed in ILR
1976 (1) Ker.287).
3. Powers to control production, supply, distribution, etc., of essential commodities.
(1) If the Central Government is of opinion that it is necessary or expedient so to do for
maintaining or increasing supplies of any essential commodity or for securing their
equitable distribution and availability at fair prices, 9 [or for securing any essential
commodity for the Defence of India or the Efficient conduct of military operations], it
may, by order, provide for regulating or prohibiting the production, supply and
distribution thereof and trade and commerce therein. (2) Without prejudice to the
generality of the powers conferred by sub-section (1), an order made thereunder may
provide - (a) For regulating by licences, permits or otherwise the production or
manufacture of any essential commodity; (b) For bringing under cultivation any waste or
arable land whether appurtenant to a building or not for the growing thereon of food-
crops generally or of specified food-crops, and for otherwise maintaining or increasing
the cultivation of food-crops generally, or of specified foodcrops; (c) For controlling the
price at which essential commodity may be bought or sold; (d) For regulating by
licences, permits or otherwise the storage, transport, distribution, disposal, acquisition,
use or consumption of, any essential commodity; (e) For prohibiting the withholding
from sale of any essential commodity ordinarily kept for sale, 10f, ) For requiring any
person holding in stock, or engaged in the production, or in the business of buying or
selling, of any essential commodity, - (a) To sell the whole or a specified part of the
quantity held in stock or produced or received by him, or (b) In the case of any such
commodity which is likely to be produced or received by him, to sell the whole or a
specified part of such commodity when produced or received by him, to the Central
Government or a State Government or to an officer or agent of such Government or to a
Corporation owned or controlled by such Government or to such other person or class
of persons and in such circumstances as may be specified in the order. Explanation
11.An order made under this clause in relation to food-grains, edible oilseeds or
edible oils, may, having regard to the estimated production, in the concerned area, of
such foodgrains, edible oilseeds and edible oils, fix the quantity to be sold by the
producers in such area and may also fix, or provide for the fixation of, such quantity on
a graded basis, having regard to the aggregate of the area held by, or under the
cultivation of, the producers. Explanation 2.For the purposes of this clause,
"production" with its grammatical variations and cognate expressions includes
manufacture of edible oils and sugar;] (g) For regulating or prohibiting any class of
commercial or financial transactions relating to foodstuffs or cotton textiles which, in the
opinion of the authority making the order, are, or, if unregulated, are likely to be,
detrimental to the public interest; (h) For collecting any information or statistics with a
view to regulating or prohibiting any of the aforesaid matters; (i) For requiring persons
engaged in the production, supply or distribution of or trade and commerce in, any
essential commodity to maintain and produce for inspection such books, accounts and
records relating to their business and to furnish such information relating thereto, as
may be specified in the order; [(ii) For the grant or issue of licences, permits or other
documents, the charging of fees therefor, the deposit of such sum, if any, as may be
specified in the order as security for the due performance of the conditions of any such
licence, permit or other document, the forfeiture of the sum so deposited or any part
thereof for contravention of any such conditions, and the adjudication of such forfeiture
by such authority as may be specified in the order;] 12[(j) For any incidental and
supplementary matters, including, in particular, the entry, search or examination of
premises, aircraft, vessels, vehicles or other conveyances and animals, and the seizure
by a person authorized to make such entry, search or exam ination, (i) Of any articles
in respect of which such person has reason to believe that a contravention of the order
has been, is being, or is about to be, committed and any packages, coverings or
receptacles in which such articles are found; (ii) Of any aircraft, vessel, vehicle or other
conveyance or animal used in carrying such articles, if such person has reason to
believe that such aircraft, vessel, vehicle or other conveyance or animal is liable to be
forfeited under the provisions of this Act; 13[(iii) Of any books of accounts and
documents which in the opinion of such person, may be useful for, or relevant to, any
proceeding under this Act and the person from whose custody such books of accounts
or documents are seized shall be entitled to make copies thereof or to take extracts
therefrom in the presence of an officer having the custody of such books of accounts or
documents.]] (3) Where any person sells any essential commodity in compliance with
an order made with reference to Clause (f) of sub-section (2), there shall be paid to him
the price therefor as hereinafter provided (a) Where the price can, consistently with
the controlled price, if any, fixed under this section, be agreed upon, the agreed price;
(b)Where no such agreement can be reached, the price calculated with reference to the
controlled price, if any, (c) Where neither Clause (a) nor Clause (b) applies, the price
calculated at the market rate prevailing in the locality at the date of sale. 14[(3-A) (i) If
the Central Government is of opinion that it is necessary so to do for controlling the rise
in prices, or preventing the hoarding, of any food-stuff in any locality, it may, by
notification in the Official Gazette, direct that notwithstanding anything contained in sub-
section (3), the price at which the food-stuff shall be sold in the locality in compliance
with an order made with reference to Clause (f) of sub-section (2) shall be regulated in
accordance with the provisions of this subsection. (ii) Any notification issued under this
sub-section shall remain in force for such period not exceeding three months as may be
specified in the notification. (iii) Where, after the issue of a notification under this sub-
section any person sells foodstuff of the kind specified therein and in the locality so
specified, in compliance with an order made with reference to Clause (f) of sub-section
(2), there shall be paid to the seller as the price thereforeWhere the price can,
consistently with the controlled price of the foodstuff, if any, fixed under this section, be
agreed upon, the agreed price; (a) Where no such agreement can be reached, the price
calculated with reference to the controlled price, if any; (b) Where neither Clause (a) nor
Clause (b) applies, the price calculated with reference to average market rate prevailing
in the locality during the period of three months immediately preceding the date of the
notification. (iv) For the purposes of sub-clause (c) of Clause (iii), the average market
rate prevailing in the locality shall be determined by an officer authorised by the Central
Government in this behalf, with reference to the prevailing market rates for which
published figures are available in respect of that locality or of a neighbouring locality;
and the average market rate so determined shall be final and shall not be called in
question in any court.
(3-B)Where any person is required, by an order made with reference to Clause (f) of
subsection (2), to sell to the Central Government or a State Government or to an officer
or agent of such Government or to a Corporation owned or controlled by such
Government, any grade or variety or foodgrains, edible oil seeds or edible oils in relation
to which no notification has been issued under sub-section (3-A), or such notification
having been issued, has ceased to be in force, there shall be paid to the person
concerned, notwithstanding anything to the contrary contained sub-section (3), an
amount equal to the procurement price of such foodgrains, edible oiiseeds or edible oils,
as the case may be, specified by the State Government, with the previous approval of
the Central Government having regard to . (a) The controlled price, if any, fixed under
this section or by or under any other law for the time being in force for such grade or
variety of foodgrains, edible oilseeds or edible oils; The general crop prospects;
(c) The need for making such grade or variety of foodgrains, edible oilseeds or edible
oils available at reasonable prices to the consumers, particularly the vulnerable sections
of the consumers; and (d) The recommendations, if any, of the Agricultural Prices
Commission with regard to the price of the concerned grade or variety of foodgrains,
edible oilseeds or edible oils.] is[(3-C) Where any producer is required by an order
made with reference to Clause (f) of sub-section (2) to sell any kind of sugar (whether to
the Central Government or a State Government or to an officer or agent of such
Government or to any other person or class of persons) and either no notification in
respect of such sugar has been issued under sub-section (3-A) or any such notification,
having been issued, has ceased to remain in force by efflux of time, then,
notwithstanding anything contained in sub-section (3), there shall be paid to that
producer an amount therefor which shall be calculated with reference to such price of
sugar as the Central Government may, by order, determine, having regard to (a) The
minimum price, if any, fixed for sugarcane by the Central Government under this
section; (b) The manufacturing cost of sugar; (c) The duty or tax, if any, paid or payable
thereon; and (d) The securing of a reasonable return on the capital employed in the
business of manufacturing sugar, and different prices may be determined from time to
time for different areas or for different factories or for different kinds of sugar.
Explanation. For the purposes of this sub-section, "producer" means a person
carrying on the business of manufacturing sugar.] 17[(30) The central Government may
direct that no producer, importer or exporter shall sell or otherwise dispose of or deliver
any kind of sugar or remove any kind of sugar from the bonded godowns of the factory
in which it is produced, whether such godowns are situated within the premises of the
factory or outside or from the warehouses of the importers or exporters, as the case
may be, except under and in accordance with the direction issued by the Government:
Provided that this sub-section shall not affect the pledging of such sugar by any
producer or importer in favour of any scheduled bank as defined in clause (e) of section
2 of the Reserve Bank of India Act, 1934 (2 of 1934) or any corresponding new bank
constituted under section 3 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (5 of 1970), so, however, that no such bank shall sell the sugar
pledged to it except under and in accordance with a direction issued by the Central
Government. (3E) The Central Government may, from time to time, by general or
special order, direct any producer or importer or exporter or recognised dealer or any
class of producers or recognised dealers, to take action regarding production,
maintenance of stocks, storage, sale, grading, packing, marking, weighment, disposal,
delivery and distribution of any kind of sugar in the manner specified in the direction.
Explanation. For the purpose of sub-section (30) and this sub-section, (a)
"producer" means a person carrying on the business of manufacturing sugar; (b)
"recognised dealer" means a person carrying on the business of purchasing, selling or
distributing sugar; (c) "sugar" includes plantation white sugar, raw sugar and refined
sugar, whether indigenously produced or imported.] (4) If the Central Government is of
opinion that it is necessary so to do for maintaining or increasing the production and
supply of an essential commodity, it may, by order, authorise any person (hereinafter
referred to as an authorised controller) to exercise, with respect to the whole or any part
of any such undertaking engaged in the production and supply of the commodity as may
be specified in the order such functions of control as may be provided therein and so
long as such order is in force with respect to any undertaking or part thereof,- (a) The
authorised controller shall exercise his functions in accordance with any instructions
given to him by the Central Government, so, however, that he shall not have any power
to give any direction inconsistent with the provisions of any enactment or any instrument
determining the functions of the persons in-charge of the management of the
undertaking, except in so far as may be specifically provided by the order; and (b) The
undertaking or part shall be carried on in accordance with any directions given by the
authorised controller under the provisions of the order, and any person having any
functions of management in relation to the undertaking or part shall comply with any
such directions. (5) An order made under this section shall, - (a) In the case of an order
of a general nature or affecting a class of persons, be notified in the Official Gazette;
and (b) In the case of an order directed to a specified individual be served on such
individual- (i) By delivering or tendering it to that individual, or (ii) If it cannot be so
delivered or tendered, by affixing it on the outer door or some other conspicuous part of
the premises in which that individual lives, and a written report thereof shall be prepared
and witnessed by two persons living in the neighbourhood. (6) Every order made under
this section by the Central Government or by any officer or authority of the Central
Government shall be laid before both Houses of Parliament, as soon as may be, after it
is made. NOTES
Levy of Market fee on Seeds or food grains It is not possible to arrive at a finding
that the food grains meant to be utilised as seeds had irretrievably lost their basic
character. Hence, grant of any relief against levy of market fee not possible (SC)
Seedsman Association, Hyderabad and Others v. Principal Secretary to Govt. ,A.P. and
Others 2004 (9) SCC 56. Vanaspati manufactured containing 78% of solvent
mustard oil as against 20% permitted If the contravention of the order made under
Section 3 is by a company, the persons who may be held guilty and punished are the
company itself, every person in charge of the company and any director, manager,
secretary or other officer of the company with whose consent or connivance or because
of neglect, attributable to whom the offence has been committed State of Punjab v.
Kasturi La/ -2004 (3) KLT SN 45: AIR 2004 SC 4087. Suspension of licence Ground
of alleged deficiency in stock of fine boiled rice held by wholesale dealer and four other
irregularities. There was no physical weighment of entire stock by Authorities. Order of
recovery of value of missing quantity of rice from dealer and forfeiture of entire security
deposit is liable to be quashed The matter is directed to be reconsidered. N.Sarojini v.
District Collector, Thiruvananthapuram And OthersAIR 1999 Ker. 119. Kerosene
(Restriction on Use and Fixation of Ceiling Price) Order ,1993 Constitutionality of
creating fund by executive order for administering Control Order Distribution of
Kerosene through public distribution system in State of M.P. The kerosene price is
fixed. Hence an executive instruction for "rounding off" the amount and depositing the
savings therefrom by the wholesalers in the Collectors fund for being utilized for
maintaining and strengthening supply and availability of kerosene to consumers is held
to be ultra vires of Article 265 of the Constitution. Nagrik Upbhokta M. Manch v. Union
of India 2002 (5) SCC 466 : AIR 2002 SC 2405. Wheat Roller Flour Mills Licensing
and Control Order 1957, Clause 10 Under Kerala Food grains Dealers (Licensing)
Order 1967, petitioner is licensed to purchase wheat and sell its products. The rates of
wheat and wheat products increased from specified date The petitioner is having stock
of some quantity on such date In that case the petitioner cannot be directed to pay
differential cost of wheat. Wheat in stock is held by petitioner as its owner and not as
agent of Government. AIR 1990 Kerala 14. The power of regulation or prohibition to
be exercised only without violating any of the fundamental rights. Azhaikianambia
Pillai & Others v. State of Kerala 1968 KLT 27. Considering the object of the Rice and
Paddy (Procurement by Levy) Order, 1966, which is to secure equitable distribution and
availability at fair prices of food grains for all at a time of countrywide food-shortage, the
determination of quantity to be procured from or to be allowed to be retained by a
producer must necessarily be left to the State Government who is the best appraiser of
the pressure of the time, the urgency of the situation and the maintenance of public
morals. State of Kerala & Others v.Annam Alias Thankamma & Others 1968 KLT
390 FB : 1968 KU J 664 : ILR 1968 (1) Ker.549. Levy of administrative surcharge on
export of tapioca. The levy is bad is to is not levy of licence fee for regulating the trade
or for grant of permits. The order dated 15-4-66 formulating the scheme was not an
order under any of the provisions of S.3 of the Act. It was an impost on export which the
State had no power to do. Kerala Tapioca (Manufacture and Export Control) Order,
1966. State of Kerala v.Govindan AIR 1975 SC 152 : 1974 KLT 876. There is
nothing on the face of the Government order to show that there is any correlation
between the levy and the expenses to be incurred for rendering services. There is no
material furnished to show what exactly was the service that the Government rendered
to exporters of tapioca and what exactly was the amount which the Government had to
spend on that account. It is to the general revenue or the Consolidated Fund of the
State that it goes. The levy cannot be sustained as fee. Tapioca (Manufacture and
Export Control) Order, 1966 K.P.Govindan v. State of Kerala & Others. 1971 KLT 910
: ILR 1971 (2) Ker .524. To interpret the expression in the sub-section 'as soon as may
be' to mean 'within a reasonable time' would make the duration of the law uncertain and
therefore cannot be accepted. The obligation is not laid on the State Government to lay
Orders made by it before the Parliament. State of Kerala & Others v.Annam Alias
Thankamma & Others 1968 KLT 390 FB : 1968 KU J 664 : ILR 1968 (1) Ker. 549. The
State Government can only pass Orders by virtue of the powers conferred on it by the
Central Government by notified order as contemplated by Section 5. The powers of the
State Government are confined to the matters specified in the order conferring the
powers. Abdulla v. State of Kerala 1973 KLT 261 :1973 KU J 347.
4.Imposition of duties on State Governments, etc.An order made under Section 3 may
confer powers and impose duties upon the Central Government or the State
Government or officers and authorities of the Central Government or State Government,
and may contain directions to any State Government or to officers and authorities
thereof as to the exercise of any Such powers or the discharge of any such duties.
5. Delegation Of Powers. The Central Government may, by notified order, direct that
18[the power to make orders or issue notifications under Section 3] shall, in relation to
such matters and subject to such conditions, if any, as may be specified in the direction,
be exercisable also by- (a) Such officer or authority subordinate to the Central
Government; or (b) Such State Government or such officer or authority subordinate to a
State Government. As may be specified in the direction.
6. Effect of orders inconsistent with other enactments. Any order made under Section
3 shall have effect notwithstanding anything inconsistent therewith contained in any
enactment other than this Act or any instrument having effect by virtue of any enactment
other than this Act.
6-A. Confiscation of essential commodity. Where any essential commodity is seized
in pursuance of an order under Section 3 in relation thereto, a report of such seizure
shall, without unreasonable delay, be made to] the Collector of the district or the
Presidency town in which such essential commodity is seized and whether or not a
prosecution is instituted for the contravention of such order, the Collector may, if he
thinks it expedient so to do, direct the essential commodity so seized to be produced for
inspection before him, and if he is satisfied that there has been a contravention of the
order may order confiscation of (a) The essential commodity so seized; (b) Any
package, covering or receptacle in which such essential commodity is found and; (c)
Any animal, vehicle, vessel or other conveyance used in carrying such essential
commodity:Provided that without prejudice to any action which may be taken under any
other provision of this Act, no foodgrains or edible oilseeds in pursuance of an order
made under Section 3 in relation thereto from a producer shall, if the seized foodgrains
or edible oilseeds have been produced by him, be confiscated under this Section:
Provided further that in the case of any animal, vehicle, vessel or other conveyance
used for the carriage of goods or passengers for hire, the owner of such animal, vehicle,
vessel or other conveyance shall be given an option to pay, in lieu of its confiscation, a
fine not exceeding the market price at the date of seizure of the essential commodity
sought to be carried by such animal, vehicle, vessel or other conveyance.(2) Where the
Collector, on receiving a report of seizure or on inspection of any essential commodity
under sub-section (1), is Of the opinion that the essential commodity is subject to
speedy and natural decay or it is otherwise expedient in the public interest so to do, he
may- (i) Order the same to be sold at the controlled price, if any, fixed for essential
commodity under this Act or under any other law for the time being in force; or(ii)Where
no such price is fixed, order the same to be sold by public auction: Provided that in the
case of any such essential commodity the retail sale price whereof has been fixed by
the Central Government or a State Government under this Act or under any other law
for the time being in force, the Collector may, for its equitable distribution and availability
at fair prices, order the same to be sold through fair price shops at the price so fixed.]
(3) Where any essential commodity is sold, as aforesaid, the sale proceeds thereof,
after deduction of the expenses of any such sale or auction or other incidental expenses
relating thereto, shall - (a) Where no order or confiscation is ultimately passed by the
Collector, (b) Where an order passed on appeal under sub-section (1) of Section 60 so
requires, or (c) Where in a prosecution instituted for the contravention of the order in
respect of which an order of confiscation has been made under this section, the person
concerned is acquitted, be paid to the owner or the person from whom it is seized.
6B. Issue of show cause notice before confiscation of food grains.- No order
confiscating any essential commodity, package. covering or receptacle, animal, vehicle,
vessel or other conveyance shall be made under Section 6A unless the owner of such
essential commodity, package, covering, receptacle, animal, vehicle, vessel or other
conveyance] or the person from whom it is seized (a) Is given a notice in writing
informing him of the grounds on which it is proposed to confiscate the lessential
commodity, package, covering or receptacle, animal, vehicle, vessel or other
conveyance; (b) Is given an opportunity of making a presentation in writing within such
reasonable time as may be specified in the notice against the grounds of confiscation;
and (c) Is given a reasonable opportunity of being heard in the matter.
(2) Without prejudice to the provisions of sub-section (1), no order confiscating any
animal, vehicle, vessel or other conveyance shall be made under Section 6-A if the
owner of the animal, vehicle, vessel or other conveyance proves to the satisfaction of
the Collector that it was used in carrying the essential commodity without the knowledge
or connivance of the owner himself, his agent, if any, and the person in charge of the
animal, vehicle, vessel or other conveyance and that each of them had taken all
reasonable and necessary precautions against such use. No order confiscating any
essential commodity package, covering, receptacle, animal, vehicle, vessel or other
conveyance shall be invalid merely by reason of any defect or irregularity in the notice,
given under clause (a) of sub-section (1), if, in giving such notice, the provisions of that
clause have been substantially complied with.
6C. Appeal. (1) Any person aggrieved by an order of confiscation under Section 6A
may, within one month from the date of the communication to him of such order, appeal
to any judicial authority appointed by the State Government concerned and the judicial
authority] shall, after giving an opportunity to the appellant to be heard, pass such order
as it may think fit, confirming, modifying or annulling the order appealed against. (2)
Where an order under Section 6-A is modified or annulled by such judicial authority, or
where in a prosecution instituted for the contravention of the order in respect of which
an order of confiscation has been made under Section 6A, the person concerned is
acquitted, and in either case it is not possible for any reason to 36[return the essential
commodities seized, such persons shall, except as provided by sub-section (3) of
Section 6-A, be paid the price therefor as if the essential commodity, had been sold to
the Government with reasonable interest calculated from the day of the seizure of the
essential commodity land such price shall be determined- (i) In the case foodgrains,
edible oilseeds or edible oils, in accordance with the provisions of sub-section (3-B) of
Section 3; (ii) In the case of sugar, in accordance with the provisions of sub-section (3-
C) of Section 3; and (iii) In the case of any other essential commodity, in accordance
with the provisions of sub-section (3) of Section 3.
6D. Award of confiscation not to interfere with other punishments. The award of any
Confiscation under this Act by the Collector shall not prevent the infliction of any
punishment to which the person affected thereby is liable under this Act.
6E. Bar of jurisdiction in certain cases. Whenever any essential commodity is seized
in Pursuance Of an Order made under Section 3 in relation thereto, or any package,
covering or receptacle in which such essential Commodity is found, or any animal,
vehicle, vessel or other conveyance used in carrying such essential commodity is
seized pending Confiscation under Section 6-A, the Collector, or, as the case may be,
the Judicial authority appointed under Section 6C shall have, and, notwithstanding
anything to the contrary contained in any other law for the time being in force, lany other
court, tribunal or authority] shall not have jurisdiction to make orders with regard to the
possession, delivery, disposal, release or distribution of such essential commodity,
package, covering, receptacle, animal, vehicle, vessel or other conveyance.
NOTES Confiscation of vehicles or container containing essential commodity under
Section 6A, is not contemplated in absence of violation of Section 3. Under Section 6A,
first target is confiscation of the essential commodity. If the commodity is not liable to be
confiscated, question of confiscation of vehicles or container cannot arise. ( Andhra
Pradesh Petroleum Products Order, 1980) Govt. of A.13 . v. V.Ranga Rao (2005)
12 SCC 274. The contravention of the conditions of licence is not a sufficient ground for
confiscation in terms of Section 6A of the Act and, therefore, storage of goods in a place
other than the place mentioned as godown in the licence could only be a contravention
of the conditions of licence and therefore, insufficient to justify a confiscation under
Section 6A of the Act. Moideen v. State of Kerala -1999 (1) KLT 824: AIR 1999
Ker.282. A contravention of the provision may justify a seizure but cannot justify a
confiscation under S.6A of the Act. In this view of the matter, assuming for argument's
sake that a seizure of the goods belonging to the appellant stored in the godown of the
State Warehousing Corporation is justifiable, it cannot justify a confiscation under S.6A
of the Act because the appellant has not done any business in the said rice in
Kozhikode and therefore, there has, actually not been a sale of any essential
commodity by a dealer having his place of business noted in the licence elsewhere. If
that be so, contravention of the Licensing Order in the matter of storing cannot be
considered as a contravention of Clause 3 of the Licensing Order. We accordingly hold
that mere storage without an actual sale in a place other than the place of business
does not result in contravention of the provisions of the Licensing Order and therefore,
does not justify confiscation under S.6A of the Act. Moideen v. State of Kerala 1999
(1) KLT 824 : AIR 1999 Ker.282. [1981 KLT SN 43; Followed; 1983 KLT 240; 1978 KLT
29; AIR 1969 SC 110; AIR 1962 SC 1962; Relied on ] Validity of confiscation
proceedings The petitioner licensee is having licence of purchase, sale and storage of
food grains for a District Place 'I'. Hence the storage of foodgrains at District Place 'K' is
without licence from place K and hence in contravention of licensing order. In that case
licensing authority from place 'K' can confiscate such stock of foodgrains D. Batcha
Moideen v. State of Kerala And Others AIR 1999 Ker.243. [1983 KLT 240; 1982 KU J
592; 1981 KLT SN 81; 1978 KLT 291; ILR 1978 (1) Ker 673; Referred to] Reference to
property or object should always be understood as comprehending its money value
equivalent. A reading of S.6A (3) (a) shows that it contemplates confiscation even after
the essential commodity is sold. Even in genuine cases where confiscation is warranted
the property may have to be sold before ordering confiscation. When S.6A (3) is read
along with S.6A (3) (a) what follows is that even where sale of the essential commodity
is succeeded by an order of confiscation the sale proceeds need not be returned. The
money equivalent of the essential commodity or property is also liable to confiscation or
forfeiture. Ragha van v. State of Kerala 1986 KLT 635: ILR 1986 (2) Ker.527 : KLT
189 Overruled # Confiscation under S.6A is independent of prosecution. Even without a
prosecution for contravention of the order confiscation could be resorted to. But the
satisfaction that there was contravention of the order is a condition precedent to
confiscation. Such a satisfaction by itself is not sufficient to order confiscation.
Something more is required. On the basis of the materials collected in the enquiry, over
and above the satisfaction of the contravention of the order, there must be the further
satisfaction that it is a fit case for confiscation. The discretion will have to be exercised
judiciously and properly. The order is justiciable under S.6 (c) and therefore the order
must be supported by reasons also. Ragha van v. State of Kerala 1986 KLT 635 :
ILR 1986 (2) Ker.527. The provisions in S.6A of the Act are not mandatory and the
Section is only an enabling one. Before passing an order of confiscation, the concerned
authority must be satisfied that there was contravention of a provision of law touching
the matter and there was proper and justifiable grounds for confiscation. Sathish &
Co. v. State 1983 KLT 240 : 21982 KU 592. If prosecution ends in a conviction,
S.7(1)(b) enjoins that property in respect of which order was contracted, ' shall be
forfeited' to Government. The language of this clause is clearly, mandatory and leaves
no option to court to order forfeiture. Only a limited power of sale of the commodity in
the manner prescribed by sub-s.(2) of S.6A is granted. This shows that legislature did
not intend to confer a power on Collector to return the essential commodity to the owner
or the person from whose possession it was seized. (SC) Shambu Dayal v. State of
West Bengal 1990 (2) KLT SN.2 P.2 The criminal courts of the country have the
jurisdiction and the ouster of the ordinary criminal court in respect of a crime can only be
inferred if that is the irresistible conclusion flowing from necessary implication of the new
Act. High Court was right in coming to the conclusion that the Criminal Court retained
jurisdiction and was not completely ousted of the jurisdiction. (SC) State of MR v.
Rameswar Rathod 1990 (2) KU J 775. Though proceedings for confiscation by the
Collector and criminal prosecution for contravention of the order in respect of which an
order of confiscation has been made under S.6A are independent and parallel
proceedings, acquittal in the prosecution will amount to annulling the confiscation order.
Unni v. State 1983 KLT 11: 1983 KLN 40: 1982 KU J 716. In the absence of any
prohibition with respect to the issue of notice or giving of an opportunity of being heard,
there is a discretion in the matter vested in the Collector and that has to be exercised
after due satisfaction on an objective consideration of all aspects touching the matter.
The public authorities making public orders should clearly state the reasons behind the
decision arrived at by them. Balsubramanian v. District Collector 1984 KLT 174:
1984 KLN 77: 1984 KU J 54 : ILR 1984 (2) Ker.136 : AIR 1984 Ker.87. The fact that the
2" report alone referred to the perishable character of the goods, and not the first report,
is immaterial so long as the two reports can be regarded as integral parts of one report.
Kunju Labha v. Director of Coir 1981 KLT SN.136 P.74. When confiscation is
upheld and the person is also convicted, it looks strange that money will have to be
returned on the sole ground that the sale proceeds are not liable for confiscation. A
person guilty of contravening the provisions of Cement Control Order cannot thus retain
either the goods confiscated or the money to which it is converted. State v.Chakku
1984 KLT 742 :1984 KLN 429 1984 KU J 574. The expression District and Sessions
Judge' wherever used, connotes that the concerned Officer acts as District Judge when
he functions on the criminal side. Once it is held that the judicial authority is a court the
provisions of either the Civil Courts Act or the Code of Criminal Procedure should apply.
Venugopal v. Tahsildar 1982 KLT 950. Food Grains stored in contravention of
provisions in Food Grains Dealers Licensing order Element of mens rea is not
necessary. Kunhimannan v.Addl.S.I.of Police 1976 KLT 585 : ILR 1976 (2)
Ker.397. Confiscation of articles belonging to a person is in the nature of a penalty and
before that is ordered he is entitled to know the place where and the time when the
alleged offence was committed and the facts constituting the offence. Abdul Kader v.
State of Kerala 1975 KLT 151.
7. PenaltiesIf any person contravenes any order made under Section 3, (a) He shall
be punishable, - (i) In the case of an order made With reference to Clause (h) or Clause
(i) of subsection (2) of that section, with imprisonment for a term which may extend to
one year and shall also be liable to fine, and (ii) In the case of any other order, with
imprisonment for a term which shall not be less than three months but which may
extend to seven years and Shall also be liable to fine; Provided that the court may, for
any adequate and special reasons to be mentioned in the judgement, impose a
sentence of imprisonment for a term of less than three months; (b) Any property in
respect of which the order has been contravened shall be forfeited to the Government;
(c) Any package, Covering or receptacle in which the property is found and any animal,
vehicle, Vessel or Other Conveyance used in Carrying the commodity shall, if the court
so orders, be forfeited to the Government.
(2) If any Person to whom a direction is given under Clause (b) of subsection (4) of
Section 3 fails to comply with the direction, he shall he Punishable with imprisonment for
a term which shall not be less than three months but which may extend to seven years
and shall also be liable to fine: Provided that the court may, for any adequate and
special reasons to be mentioned in the judgement, impose a sentence of imprisonment
for a term of less than three months.
(2A) If any person convicted of an offence under sub-clause (ii) of clause (a) of sub-
section (1) or under sub-section (2) is again convicted of an offence under the same
provision, he shall be punishable with imprisonment for the second and for every
subsequent offence for a term which shall not be less than six months but which may
extend to seven years and shall also be liable to fine: 48[Provided that the court may,
for any adequate and special reasons to be mentioned in the judgement impose a
sentence of imprisonment for a term of less than six months.
(2B) For the purposes of sub-sections (1), (2) and (2A), the fact that an offence under
subclause (ii) of clause (a) of sub-section (1) or under sub-section (2) has caused no
substantial harm to the general public or to any individual, shall be an adequate and
special reason for awarding a sentence of imprisonment for a term of less than three
months, or six months, as the case may be.
(3) Where a person having been convicted of an offence under sub-section (1) is again
convicted of an offence under that sub-section for contravention of an order in respect
of an essential commodity, the court by which such person is convicted shall, in addition
to any penalty which may be imposed on him under that sub-section, by order, direct
that that person shall not carry on any business in that essential commodity for such
period, not being less than six months, as may be specified by Court in the order.
7-A. Power of Central Government to recover certain amounts as arrears of land
revenue. (1) Where any person, liable to (a) Pay any amount in pursuance of any
order made under Section 3, or (b) Deposit any amount to the credit of anyAccount or
Fund constituted by or in pursuance of any order made under that section, makes any
default in paying or depositing the whole or any part of such amount, the amount in
respect of which such default has been made shall, whether such order was made
before or after the commencement of the Essential Commodities (Amendment) Act,
1984 (34 of 1984), and whether the liability of such person to pay or deposit such
amount arose before or after such commencement be recoverable by Government
together with simple interest due thereon compiled at the rate of "[fifteen percent] per
annum from the date of such default to the date of recovery of such amount, as an
arrear of land revenue "or as a public demand. (2) The amount recovered under sub-
section (1) shall be dealt with in accordance with the order under which the liability to
pay or deposit such amount arose, (3) Notwithstanding anything contained in any other
law for the time being in force or any contract to the contrary, no court, tribunal or other
authority shall grant any injunction or make any order prohibiting or restraining any
Government from recovering any amount as an arrear of land revenue "or as a public
demand] in pursuance of the provisions of sub-section (1). (4) if any order, in pursuance
of which any amount has been recovered by Government as an arrear of land revenue
or as a public demand] under sub-section (1) is declared by a competent court, after
giving to the Government a reasonable opportunity of being heard, to be invalid, the
Government shall refund the amount so recovered by it to the person from whom it was
recovered. together with simple interest due thereon, computed at the rate of "[fifteen
percent] per annum, from the date of recovery of such amount to the date on which
such refund is made. Explanation. For the purposes of this section, "Government"
means the Government by which the concerned order under Section 3 was made or
where such order was made by an officer or authority subordinate to any Government,
that Government.
NOTES
Maximum punishment for offence under 5.7 (1) (a) (ii) of Essential Commodities Act is
not one year but seven years. Order of High Court is liable to be set aside. (SC)
State of A. P v. Farmers Service Coop. Society and Others 2004 (6) SCC 683. S.7
refers to contravention of any order made under S.3. It is essential for bringing in
application of S.7 to show that some order has been made under S.3 and the order has
been contravened. S.3 deals with powers to control production, supply, distribution etc.
of essential commodities. Excise of such powers, can be done by "order". According to
S.2(c), "notified order" means an order notified in the Official Gazette, and S.2 (cc)
provides that "order' includes a direction issued thereunder. (SC) Prakash Babu v.
State of M. P. -2004 (3) KLT 7E1 : 2004 (7) SCC 490. [1981 (4) SCC 535; Referred to]
In the present case the Special Court constituted for the trial of E.C. Act cases was a
court of exclusive jurisdiction and it had not been vested with the power of Judicial
Magistrate for the purpose of dealing with E.C. Act cases. Therefore, the learned
special judge had no jurisdiction to pass the impugned order of conviction and
sentence. Mahadeve lyer v:State of Kerala 2004 (2) KLT 562. [AIR 2001 SC 2972:
Followed] S.7, S.12AA (j) S262 (2) of Code providing that in summary trials court
cannot pass sentence of imprisonment exceeding three months The contention that
since offences under the Act have to be tried summarily, sentence of imprisonment for
more than 3 months cannot be passed negatived. (Go].) Rama Fertilizers (P) Ltd v.
State of Gujarat 2001 (3) KLT SN 121. [Cd.RA 410 of 1989; Overruled 1984 (9) Efr
340; Dissented from] It does not require much effort to convince any one that the
opinion formed by a person without conducting any scientific test is likely to go wrong.
Moreover, it is almost impossible for any human being, however experienced he may
be, to pronounce opinion regarding the scientific standard of any stuff merely by
smelling it. Whenever a particular scientific standard is fixed for a commodity the
ascertainment must be made by subjecting it to scientific test. The position may perhaps
be different if no standard as such is fixed for a particular commodity or article the
possession of which amounts to an offence. If the supply officers who inspect places of
storage of such suspected commodities fail to take samples from such stocks and have
then analysed in the laboratory, the consequence is inevitable that criminal courts would
find it difficult to conclude that the commodity concerned is of the particular standard
fixed by law. Kerosene Control Order, 1968 (Kerala), Clause 16 Kunhimoideenkutty v
State of Kerala 1988 (2) KLT 128; 1988 (2) KU J 63. Unless the accused succeeds in
proving beyond reasonable doubt that he had no mens rea in the contravention of any
particular clause of the Orders issued under the Act, the court has to proceed on the
assumption that the accused has the requisite mens rea. Though it cannot be said that
unless the accused adduces defence evidence the burden cast on him would remain
undischarged in all cases, it would normally be difficult to prove any fact "beyond
reasonable doubt" without the aid of positive evidence adduced for that purpose.
However, an accused may succeed in discharging the onus either by adducing defence
evidence or by eliciting answers from prosecution witnesses or by highlighting
circumstances available in prosecution evidence itself. It would all depend upon facts
and circumstances in each case. Viswanathan Na/ru Drugs Inspector 1988 (2) KLT
565 : 1988 (2) KU J 423. In the case of statutory offence, the Courts have held that the
Parliament intended to impose strict liability and have convicted defendants who lacked
mens rea. In the case of statutory offence the offences are always the creation of
statute. The Courts in enforcing them profess merely to be implementing the express
intention of Parliament. The courts are greatly influenced in their construction of the
statute by the degree of social danger which they believe to be involved in the offence in
question: They take judicial notice of the problems with which the country is confronted.
The imposition of strict liability does something towards insuring to do everything
possible to see that important welfare regulations are carried out. Muhammed v.
State of Kerala 1990 (1) KLT SN.49.P.42 : 1990 (1) KU J 308. Notifications of the
kind in question are not matters for judicial notice, but for proof by production of the
gazette or otherwise. As no notification fixing the maximum price for the goods is in
proof here, the prosecution cannot be said to have made out a case against the
accused. Chandrasekharan v State - 1966 KLT 638.
8. Attempts and abetment. Any person who attempts to contravene, or abets a
contravention of, any order made under Section 3 shall be deemed to have contravened
that order.
9. False statements. If any person, - (i) When required by any order made under
Section 3 to make any statement or furnish any information, makes any statement or
furnishes any information which is false in any material particular and which he knows
or has reasonable cause to believe to be false, or does not believe to be true, or (ii)
Makes any such statement as aforesaid in any book, account, record, declaration,
return or other document which he is required by any such order to maintain or furnish,
he shall be punishable with imprisonment for a term which may extend to five years, or
with fine, or with both.
10. Offences by companies. (1) If the person contravening an order made under
Section 31s a company, every person who, at the time the contravention was
committed, was in charge of, and was responsible to, the company for the conduct of
the business of the company as well as the company, shall be deemed to be guilty of
the contravention and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable
to any punishment if he proves that the contravention took place without his knowledge
or that he exercised all due diligence to prevent such contravention. Notwithstanding
anything contained in sub-section (1), where an offence under this Act has been
committed by a company and it is proved that the offence has been committed with the
consent or connivance of, or is attributable to any neglect on the part of any director,
manager, secretary or other officer of the company, such director, manager, secretary
or other officer shall also be deemed to be guilty of that offence and shall be liable to be
proceeded against and punished accordingly. Explanation. For the purposes of this
Section,-- (a) "Company" means any body corporate, and includes a firm or other
association of individuals; and (b) "Director" in relation to a firm means a partner in the
firm.
10-A. Offences to be cognizable - Notwithstanding anything contained in 61[the Code of
Criminal Procedure, 1973(2 of 1974)] every offence punishable under this Act shall be
*cognizable
10B. Power of court to publish name, place:of business, etc of companies convicted
under the Act. (1) Where any company is convicted under this Act, it shall be
competent for the court convicting the company to cause the name and place of
business of the company, nature of the contravention, the fact that the company has
been so convicted and such other particulars as the court may consider to be
appropriate in the circumstances of the case, to be published at the expense of the
company in such newspapers or in such other manner as the court may direct., (2) No
publication under sub-section (1) shall be made until the period for preferring an appeal
against the orders of the court has expired without any appeal having been preferred, or
such an appeal, having been preferred, has been disposed of. (3) The expenses of any
publication under' sub-section (1) shall be recoverable from the company as if it were a
fine imposed by the court. Explanation. For the purposes of this section, company"
has the meaning assigned to it in Clause (a) of the Explanation of Section 10.
10C. Presumption of culpable mental state. (1) In any prosecution for any offence
under this Act which requires a culpable mental state on the part of the accused, the
court shall presume the existence of such mental state but it shall be a defence for the
accused to prove the fact that he had no such mental state with respect to the act
charged as an offence in that prosecution. Explanation In this section, "culpable
mental state" includes intention, motive, knowledge of a fact and the belief in, or reason
to believe, a fact.
(2) For the purposes of this section, a fact is said to be proved only when the court
believes it to exist beyond reasonable doubt and not merely when its existence is
established by a preponderance of probability.
NOTES
 The persons in charge, or the officers of the company or the company itself may be
prosecuted jointly or severally for contravention contravening order made under S.3. It
was further held that there is no statutory compulsion that the person in charge or an
officer of the company may not be prosecuted unless he be ranged alongside the
company itself. It was also held that the directors of the company seeking to have the
charge for violation of the order against themselves quashed, on ground that the
Production Manager alone was liable to be proceeded against is not justified. The High
Court was not justified in quashing the charge framed as far as the said Directors were
concerned. State of Punjab v.Kasturi Lal, (2004) 12 SCC 195 :AIR 2004 SC 4087 :
2004 Cri LJ 3866.
11. Cognizance of offences. No court shall take cognizance of any offence punishable
under this Act except on a report in writing of the facts constituting such offence made
by a person who is a public servant as defined in Section 21 of the Indian Penal Code
(45 of 1860) or any person aggrieved or any recognised consumer association, whether
such person is a member of that association or not. ExplanationFor the Purposes of
this section and Section 12-AA, " recognised consumer association" means a voluntary
consumer association registered under the Companies Act. 1956 (1 of 1956) or any
other law for the time being in force.
NOTES
One of the objects of S.11 E.C.Act is a avoidance of frivolous prosecutions. But that
object or purpose will only be defeated by giving a long rope to the public servant and
placing his opinion beyond the purview of judicial scrutiny. Vindication of justice by
bringing an offender to justice in a deserving case is also one of the purposes of S.11.
Whether it be a charge sheet or a refer report or a complaint, the sufficiency of the
material for taking cognizance is solely subject to judicial review. The only restriction or
limitation imposed on the cognizance under 5.190 of the Code by S.11.E.C.Act is
concerning the source of information on which cognizance could be taken. Even though
wording of S.11 is slightly different cognizance is on information of facts which
constitute an offence. Whether the facts brought to the notice of the court by a report or
complaint or other information constitute an offence is not a matter left, to the sweet will
and pleasure of the public servant to decide even under S.11 of the E.C.Act. Even
under Section E.C. Act, the final discretion is that of the Court. Sadanandan v State
1989 (2) KLT 819:1989 (2) KU J 465. [1980 CrI.LJ 537 Dissented] How cognizance will
have to be taken by the courts it may not be proper for the Courts to read into the
provisions that one of the modes of cognizance provided in the statute has been
impliedly repealed by another provision especially when an interpretation of the latter
provision cannot yield such a consequence. S.12-AA (1) (a) only clarifies the position by
saying that cognizance could be had on the basis of a police report also. It appears that
the main object of S.12AA (1)(a) is to provide that in spite of the provision in S.193 of
the Code of Criminal procedure, as a court of original jurisdiction, the special Judge will
be competent to take cognizance without a committal proceeding. By no stretch of
imagination, it could be read into the provisions of S.12-AA (1) (e), a Legislative intent to
exclude the operation of S.11. A harmonious interpretation keeping alive Ss.11 and 12-
AA (1) (e) which appear in quick succession in the statute is possible and a contrary
interpretation is impossible also. None of the provisions of the principal Act or the
Amending Act are indicative of the fact that the right to take cognizance or the right to
vindication of justice in relation to the offences under the Act are restricted or taken
away except as provided in S.11 which has to be read subject to the provisions of S.12-
AA (1) (e). There is no possibility of any conflict between the two provisions. They are
not mutually exclusive also. Therefore no question implied repeal could be considered
as the legislative intent. Abdul Nazar v. Mohammed Kutty 1985 KLT 824.
12. Special Provision regarding Fine. Notwithstanding anything contained in section
29 of the Code of Criminal Procedure, 1973 (2 of 1974), it shall be lawful for any
Metropolitan Magistrate, or any Judicial Magistrate of the first class specially
empowered by the State Government in this behalf, to pass a sentence of fine
exceeding five thousand rupees on any person convicted of contravening any order
made under section 3.1.
NOTES
Special Court for trial of E.G. Act came into existence as provided under S.12(9) of
E.C.Act. The Act was enforced initially for five years and was later extended for a further
period of five years from 1987 to 1992 and again extended for five years from 1992 to
1997. The Act was in force till 31-8-1997. It was thereafter Central Ordinance, 1997 was
promulgated as E.C.Special Provisions Ordinance. Again Central Ordinance, 1998 was
promulgated as no enactment of E.C. Amendment Act was in force at that time. But on
failure to replace the ordinance by enactment, the ordinance lapsed. As a result special
courts established for trial of E.C.Act cases ceased to function. The consequential
position that followed was that cases registered under the E.C.Act were to be tried
before the Magistrate having jurisdiction as it was being done prior to enactment of E.C.
(Special Provisions) Act, 1981. Karim v. State of Kerala 2006 (2) KLT 874. [(2002) 1
SCC 15 = 2002 (1) KLT (SC) (SN) 108 Relied on.
12A. Power to try summarily. (1) If the Central Government is of opinion that a
situation has arisen where, in the interests of production, supply or distribution of any
essential commodity not being an essential commodity referred to in clause (a) of sub-
section (2)] or trade or commerce therein and other relevant considerations, it is
necessary that the contravention of any order made under section 3 in relation to such
essential commodity should be tried summarily, the Central Government may, by
notification in the Official Gazette, specify such order to be a special order for purposes
of summary trial under this section, and every such notification shall be laid, as soon as
may be after it is issued, before both Houses of Parliament: Provided that (a) Every
such notification issued after the commencement of the Essential Commodities
(Amendment ) Act, 1971, shall, unless sooner rescinded, cease to operate at the
expiration of two years after the publication of such notification in the Official Gazette;
(b) Every such notification in force immediately before such commencement shall,
unless sooner rescinded, cease to operate at the expiration of two years after such
commencement: Provided further that nothing in the foregoing proviso shall affect any
case relating to the contravention of a special order specified in any such notification if
proceedings by way of summary trial have commenced before that notification is
rescinded or ceases to operate and the provisions of this section shall continue to apply
to that case as if that notification had not been rescinded or had not ceased to operate.
Notwithstanding anything contained in the Code of Criminal Procedure, 1973(2 of 1974)
all, offences relating to (a) the contravention of an order made under section 3 with
respect to- (i) Cotton or woollen textiles; or (ii) foodstuffs, including edible oilseeds and
oil; or (iii) drugs; and (b) where any notification issued under sub-section (1) in relation
to a special order is in force, the contravention of such special order, shall be tried in a
summary way by a Judicial Magistrate of the First Class specially empowered in this
behalf by the State Government or by a Metropolitan Magistrate and the provisions of
sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to
such trial: Provided that, in the case of any conviction in a summary trial under this
section, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a
term not exceeding one year: Provided further that when at the commencement of, or in
the course of, a summary trial under this section, it appears to the Magistrate that the
nature of the case is such that a sentence of imprisonment for a term exceeding one
year may have to be passed or that it is, for any other reason, undesirable to try the
case summarily, the Magistrate shall, after hearing the parties, record an order to that
effect and thereafter recall any witness who may have been examined and proceed to
hear or re-hear the case in the manner provided by the said Code. (3) Notwithstanding
anything to the contrary contained in "the Code of Criminal Procedure, 1973 (2 of 1974),
there shall be no appeal by a convicted person in any case tried summarily under this
section in which the Magistrate passes a sentence of imprisonment not exceeding one
month, "[and of fine not exceeding two thousand rupees] whether or not any order of
forfeiture of property or an order under "[section 452] of the said Code is made in
addition to such sentences, but an appeal shall lie where any sentence in excess of the
aforesaid limits is passed by the Magistrate. (4) All cases relating to the contravention of
an order referred to in clause (a) of subsection (2), not being a special order, and
pending before a Magistrate immediately before the commencement of the Essential
Commodities (Amendment)Act, 1974, and, where any notification is issued under sub-
section (1) in relation to a special order, all cases relating to the contravention of such
special order and pending before a Magistrate immediately before the date of the issue
of such notification, shall, if no witnesses have been examined before such
commencement or the said date, as the case may be, be tried in a summary way under
this section, and if any such case is pending before a Magistrate who is not competent
to try the same in a summary way under this section, it shall be forwarded to a
Magistrate so competent
NOTES
The remand orders passed by the Special Court long after it had ceased to exercise
jurisdiction in cases under the E.C. Act were without jurisdiction. Special Court dealing
with the NDPS Act cases exclusively has no power to deal with the cases under the EC
Act. State of Tamil Nadu v. Paramasiva Pandian, (2002) 1 SCC 15 : AIR 2001 SC 2972.
12B. Grant of injunction, etc., by civil courts. No civil court shall grant injunction or
make any order for any other relief against the Central Government or any State
Government or a Public Officer in respect of any act done or purporting to be done by
such Government, or such officer in his official capacity, under this Act or any order
made thereunder, until after notice of the application for such injunction or other relief
has been given to such Government or Officer.
NOTES
Proviso to S.12AA (f) empowers the Special Judge to award sentence of imprisonment
for more than 3 months. Limit of sentence of imprisonment not exceeding three months
prescribed by S.262(2) is applicable only to offences enumerated in S.260 Cr.P.C. and
not offences which are rendered summarily triable by virtue of the special enactment.
1989 (2) KLT SN.43 P.37.
13. Presumption as to orders. Where an order purports to have been made and
signed by an authority in exercise of any power conferred by or under this Act, a court
shall presume that such order was so made by that authority within the meaning of the
Indian Evidence Act 1872 (1 of 1872).
14. Burden of proof in certain cases. Where a person is prosecuted for contravening
any order made under Section 3 which prohibits him from doing any act or being in
possession of a thing without lawful authority or without a permit, licence or other
document, the burden of proving that he has such authority, permit, licence or other
document shall be on him.
15. Protection of action taken under Act. (1) No suit, Prosecution or other legal
proceeding shall lie against any person for anything which is in good faith done or
intended to be done in pursuance of any order made under Section 3. (2) No suit or
other legal proceeding shall lie against the Government for any damage caused or likely
to be caused by anything which is in good faith done or intended to be done in
pursuance of any order made under Section 3.
15A. Prosecution of public servants. Where any person who is a public servant is
accused of any offence alleged to have been committed by him while acting or
purporting to act in the discharge of his duty in pursuance of an order made under
Section 3, no court shall take cognizance of such offence except with the previous
sanction (a) of the Central Government, in the case of a person who is employed or,
as the case may be, was at the time of commission of the alleged offence employed, in
connection with the affairs of the Union; (b) of the State Government, in the case of a
person who is employed or, as the case may be, was at the time of commission of the
alleged offence employed, in connection with the affairs of the State.
 b. Laws on Maintenance of Standards of Weights and Measures:

THE LEGAL METROLOGY ACT, 2009 ACT

Throughout history, laws have been passed proclaiming that there should be truth and
accuracy in weights and measures when goods are traded. Today, all industrialized
countries have a government organization responsible for monitoring measurement
accuracy, demonstrating the importance societies place on the integrity of measurement
to a nation's economic health and prosperity. India is no exception. The Government of
India has ensured fair measure in the marketplace since the ancient time.

With a view to provide a coherent scheme and uniform standards of Weights &
Measures, the first Act namely Standards of Weight &Measurement Act 1956 was
enacted based on metric system and international system of units recognized by
International Organization of legal metrology. With regard to keep pace with rapid
advances made in the field of science and technology all over the world, practical
system of units known as SI units evolved and accepted globally.

The Central Govt. constituted a committee to consider the changes required to be made
in 1956 Act on the recommendations of International organizations, resulting which
Standards of Weights & Measures Act 1976, the regulation made there under named as
The Standards of Weights & Measures (Packaged Commodities) Rules,1977 and The
Standards of Weights & Measures (General) Rules, 1987, came into existence, the
parliament further enacted The Standards of Weights & Measures (Enf) Act 1985.

In view of rapid advancement of science & technology and globalization of economies,

there has been vast improvement in weighing and measuring techniques and has
extended the scope of weights & measures. With the view to establish the standards of
Weights & Measures, regulate trade and commerce in Weights & Measures and other
goods which are sold or distributed by weight, measure or number and for matter
connected therewith or incidental thereto, the Legal Metrology Act, 2009 was enforced
on 1-4-2011. It is an Act to establish and enforce standards of weights and measures,
regulate trade and commerce in weights, measures and other goods which are sold or
distributed by weight, measure or number and for matters connected therewith or
incidental thereto. Almost every Indian is a consumer whether they are buying food and
cloth for their basic need or fuel for an automobile, etc. When people shop or pay their
utility bills, they can feel confident that they have received the amount they are paying
for because businesses and retailers are required to measure their products and
services accurately.

The Legal Metrology Act, 2009 (Act 1 of 2010) repeals and replaces the Standard of
Weights and Measures Act, 1976 and the Standards of weights and Measures
(Enforcement) Act, 1985.
The responsibility in relation to legal metrology is shared between the Centre and the
States. Matters of national policy and other related functions such as, uniform laws on
weights and measures, technical regulations, training, precision laboratory facilities and
implementation of the International Recommendation are the concern of the Central
Government. The State Governments and Union Territory Administration are
responsible for the day to day enforcement of the laws.

Enforcement of Standards and Weights and Measures Act is entrusted with the
Directorate of Legal Metrology in each state which is essentially a 3-tier Organisation
comprising Inspectors of legal Metrology at the field level, Assistant Controller of Legal
Metrology at the district level and Controller of Legal Metrology with four Deputy
Controllers sitting at the State Level.

Legal standards of weights and measures of the States and Union Territories are
calibrated in the four Regional Reference Standard Laboratories (RRSL) located at
Ahmedabad, Bhubaneswar, Bangalore and Faridabad. These laboratories also provide
calibration services to the industries in their respective regions. They are among the
recognised laboratories for conducting the model approval tests on weights and
measuring instruments.

Legislations enacted by Government to regulate Legal Metrology:

1. The Legal Metrology Act, 2009

2. The Legal Metrology (Packaged Commodities) Rules, 2011

3. The Legal Metrology (General) Rules, 2011

4. The Legal Metrology (Approval of Models) Rules, 2011

5. The Legal Metrology (National Standards) Rules, 2011

6. The Legal Metrology (Numeration) Rules, 2011

7. The Indian Institute of Legal Metrology Rules, 2011

Legal Metrology Act, 2009

The Central Government has enacted Legal Metrology Act 2009 which had come into
force on 1st April, 2011. This Act rationalizes the units for measurement to be used in
India. Act also specifies the Metric System (metre, kilogram etc.) to be used. It regulates
the manufacture, sale and use of standard weights and measures.

Highlights
The Legal Metrology Act, 2009 replace the Standards of Weights and Measures Act,
1976 and the Standards of Weights and Measures (Enforcement) Act, 1985. It also
provides for establishing uniform standards of weights and measures regulate trade in
weights, and other goods which are sold or distributed by weight, measure or number.

The Central Govt. may appoint a Director of Legal Metrology to perform duties related to
inter-state trade and commerce. The State Govt. may appoint a Controller of Legal
Metrology to perform duties related to intra-state trade and commerce.

A person has to get approval of the model of a weight or a measure before

manufacturing or importing it by the competent authority. Also, an importer has to
register with the concerned Director. Every manufacturer, repairer and seller shall have
to obtain a licence from the respective Controller. The Act allows Govt. approved test
centres to verify weights and measures.

The Central Govt. shall have the power to make rules.

Brief details of some of the more Sections of the Act:

Standard Weights And Measures:

Sec. 4 and Sec. 5 of the Act provides that every unit of weight or measure shall be in
accordance with Metric System based on the International System of Units. The base
unit of weights and measures as per Sec. 5 of the Act is as under:

For Length metre;

For Mass kilogram;

For Time second;

For Electric current ampere;

For Thermodynamic temperature Kelvin;

For Luminous intensity candela;

For Amount of substance mole.

Sec. 6 and Sec. 7 of the Act provides that the base unit of numeration shall be the unit
of international form of India numerals. Every numeration shall be made in accordance
with the decimal system. The decimal multiples and sub-multiples shall be of such
denominations and be written in such manner as may be prescribed. Sec.7 provides
that the base units of weights and measures shall be the standard units of weights and
measures. The base unit of numeration shall be standard unit of numeration.

Sec. 8 of the Act provides that any weight or measure which conforms to the standard
of such weight or measure and also conforms to such of the provisions of Sec. 7 as are
applicable to it shall be the standard of weight or measure. No weight or measure shall
be manufactured or imported unless it conforms to the standards of weight or measure
specified under this Section. The provisions of Sec. 8 shall not apply for manufacture
done exclusively for export or for the purpose of any scientific investigation or research.

Use Of Weights Or Measures And Prohibition Of Quotation:

Sec. 10 and Sec. 11 of the Act provides that any transaction, dealing or contract in
respect of any goods, class of goods or undertakings shall be made by such weight,
measure or number as may be prescribed. Sec. 11 deals with the prohibition of
quotation etc., otherwise than in terms of standard units of weight, measure or
numeration. This Section provides that no person shall, in relation to any goods, things
or service

quote, or make announcement of, whether by word of mouth or otherwise, any price or
charge, or

issue or exhibit any price list, invoice, cash memo or other document, or

prepare or publish any advertisement, poster or other document, or

indicate the net quantity of a pre-packaged commodity, or

express in relation to any transaction or protection, any quantity or dimension,

otherwise than in accordance with the standard unit of weight, measure or numeration.
The provisions of Sec. 10 will not be applicable for export of any goods, things or
service.

Use Of Weights Or Measures And Prohibition Of Quotation:

Sec. 17 provides that every manufacturer, repairer or dealer of weight or measure shall
maintain such records and registers as may be prescribed. The same shall be produced
at the time of inspection to the persons authorized in this behalf.

Sec. 18 imposes an obligation to manufacture, pack, sell, import, distribute, deliver,

offer, expose or possess for sale any pre packaged commodity in such standard
quantities or number and bears thereon such declarations and particulars in such
manner as may be prescribed.

Sec. 19 provides that no person shall import any weight or measure unless he is
registered with the director in such manner and on payment of such fees, as may be
prescribed.
According to Sec. 20 no weight or measure, whether singly or as a part or component of
any machine shall be imported unless it conforms to the standards of weight or measure
established by or under this Act.

Every person, as per Sec. 22 of this Act, before manufacturing or importing any weight
or measure shall seek the approval of model of such weight or measure in such
manner, on payment of such fee and from such authority as may be prescribed.

License:
Sec. 23 provides that no person shall manufacture, repair or sell, or offer, expose or
possess for repair or sale, any weight or measure unless he holds a licence issued by
the Controller. No licence to repair shall be required by a manufacturer for repair of his
own weight or measure in a State other than the State of manufacture of the same.

Verification And Stamping:

Sec. 24 provides that every person, having any weight or measure in his possession,
custody or control in circumstances indicating that such weight or measure is being, or
is intended or is likely to be, used by him in any transaction.

The Central Government may prescribe the kinds of weights and measures for which
the verification is to be done through the Government approved Test Centre.

Inspection, Seizure Etc.,

Sec. 15 gives powers to the Director, Controller or any legal metrology officer, if he has
any reason to believe, whether from any information given to him by any person and
taken down in writing or from personal knowledge or otherwise, that any weight or
measure or other goods in relation to which any trade and commerce has taken place or
is intended to take place and in respect of an offence punishable under this Act appears
to have been, or is likely to be, committed are either kept or concealed in any premises
or are in the course of transportation.

Sec. 16 of the Act deals with forfeiture. Every non standard or unverified weight or
measure and every package made in contravention, used in the course or in relation to,
any trade and commerce and seized shall be liable to be forfeited to the State
Government.

Offences And Penalties:

The following are the penalties imposable under this Act for contravention of respective
provision:
Sec. 25 Penalty for use of non standard weight or measure Fine up to Rs. 25,000/;
for the second or subsequent offence imprisonment up to six months and with fine;

Sec.26 Penalty for alteration of weight and measure Fine up to Rs. 25,000/-; for the
second or subsequent offence imprisonment not less than six months but may
extend to one year or with fine or with both;

Sec. 27 Penalty for manufacture or sale of non standard weight or measure Fine up
to Rs. 25,000/-; second or subsequent offence imprisonment up to three years or with
fine or with both;

Sec. 28 Penalty for making any transaction, deal or contract in contravention of the
prescribed standards Fine up to Rs. 10,000/-; for the second or subsequent offence
imprisonment for a term up to one year or with fine or with both;

Sec. 29 Penalty for quoting or publishing etc., of non standard units Fine up to Rs.
10,000/-; second or subsequent offence imprisonment up to one year, or with fine or
with both;

Sec.30 Penalty for transactions in contravention of standard weight or measure Fine

up to Rs. 10,000/-; second or subsequent offence imprisonment up to one year, or
with fine or with both;

Sec. 31 Penalty for non production of documents etc., - Fine up to Rs. 5,000/-; second
or subsequent offence imprisonment up to one year and also with fine.

Sec. 32 Penalty for failure to get model approved Fine up to Rs. 25,000/-; second or
subsequent offence imprisonment up to one year and also with fine;

Sec. 33 Penalty for use of unverified weight or measure Fine up to Rs. 10,000/-;
second or subsequent offence imprisonment up to one year and also with fine;

Sec. 34 Penalty for sale or delivery of commodities etc., by non standard weight or
measure Fine Rs. 2,000 to Rs. 5,000; second or subsequent offence imprisonment
3 months to one year, or with fine, or with both;

Sec.35 Penalty for rendering services by non standard weight, measure or number
Fine Rs. 2,000 to Rs. 5,000; for the second and subsequent offence imprisonment 3
months to one year, or with fine or with both;

Sec. 36 Penalty for selling etc., of non standard packages Fine up to Rs. 25,000/-;
for the second offence fine up to Rs. 50,000/-; subsequent offence fine Rs. 50,000
Rs. 1,00,000 or with imprisonment up to one year or with both;
Sec. 37 Penalty for contravention by Government approved Test Centre Fine up to
Rs. 1,00,000/-; in case of employee of test centre imprisonment up to one year or with
fine up to Rs. 10,000/- or with both;

Sec. 38 Penalty for non registration by importer of weight or measure Fine up to Rs.
25,000/-; for the second and subsequent offence imprisonment up to six months or
with fine or with both;

Sec. 39 Penalty for import of non standard weight or measure Fine up to Rs.
50,000/-; for the second and subsequent offence imprisonment up to one year and
also with fine;

Sec. 40 Penalty for obstructing Director, Controller or legal metrology Officer

imprisonment up to two years; for the second and subsequent offence imprisonment up
to 5 years;

Sec. 41 Penalty for giving false information or false return Fine up to Rs. 5,000/-; for
the second or subsequent offence imprisonment up to six months and also with fine;

Sec. 42 Vexatious search imprisonment up to one year or with fine up to Rs.

10,000/- or with both;

Sec. 43 Penalty for verification in contravention of Act and Rules imprisonment up to

one year or with fine up to Rs. 10,000/- or with both;

Sec. 44 Penalty for counterfeiting of seals etc., - imprisonment 6 months to one year;
for the second and subsequent offence imprisonment 6 months to five years;

Sec. 45 Penalty for manufacture of weight and measure Fine up to Rs. 20,000/-;
second or subsequent offence up to one year or with fine or with both;

Sec. 46 Penalty for repair, sale etc., of weight and measure without licence Fine up
to Rs. 5,000/-; for the second and subsequent offence imprisonment up to one year or
with fine or with both;

Sec. 47 Penalty for tampering with licence Fine up to Rs. 25,000/- or with
imprisonment up to one year or with fine or with both;

Compounding Of Offences:

Sec. 48 deals with the compounding of offences punishable under Section 25, Sections
27 to 39, Sections 45 to 47 or any rule made either before or after the institution of the
prosecution on payment for credit to the Government of such sum as may be
prescribed. Such sum shall not exceed the maximum amount of the fine which may be
imposed under this Act for the offence so compounded.
Offences By Companies On Nomination:

Any company, as per Sec. 49 may, by order in writing, nominate directors to be

responsible under Legal Metrology Act for preventing the company of any offence or the
company has to give notice to Legal Metrology Director/ Controller/ Authorized legal
metrology office in a prescribed form indicating such director has been nominated along
with written consents and where a company has different establishments /branches/
units, different persons to be responsible can be nominated. This section also provides
nomination to continue until he ceases to be a director or any cancellation notice is
received from the company or nominee himself makes a request to cancel the
nomination.

The company so convicted under this Act for contravention of any of the provisions
thereof, the penalty will be to publish an advertisement in newspapers at the expense of
the company as the court may direct.

Appeals:
Sec. 50 deals with every appeal that shall lie from:

every decision or order under Sections 15 to 20, Sec. 22, Sections 27 to 39, Section
41 or any rule made there by the legal metrology officer;

every decision or order made by the Director under Sections 15 to 20, Section 22,
Sections 27 to 39, Sec. 41 or any rule made ;

every decision given by the Controller to the Central Government;

every decision given or order made under Sections 15 to 18, sections 23 to 25,
sections 27 to 37, sections 45 to 47 or any rule made by any legal metrology officer
appointed to the Controller. Every appeal shall lie within sixty days from the date on
which the impugned order was made.

B. Notification G.S.R 318 (e) dated 13th April, 2011.

On the request of the Industries Associations, those industries are not able to utilize
their existing old packaging material up to 31st March, 2011 and is lying with them,
Legal Metrology (Packaged Commodities) Rules, 2011 was amended vide G.S.R. No.
318(E) dated 13th April, 2011 allowing them to utilize their packaging material or
wrapper which could not be exhausted by the manufacturer or packer may be used for
packing of the material up to 30th September, 2011 or till such date the packaging
material of wrapper is exhausted, whichever is earlier, after making the corrections
required under these rules by way of stamping or putting sticker or online printing, as
the case may be.

C. Legal Metrology (Packaged Commodities) Rules, 2011 Changes w.r.t. Weights

& Measures

(Packaged Commodities Rules, 1977).

Brief details of some of the Legal Metrology Rules:

TERM:

The term Standards Weight and Measures Act has been changed to Legal Metrology
Act.
MRP DECLARATION:

Rule 2(l) provides the manner of price to be printed as Maximum or Max. retail price---
inclusive of all taxes or MRP Rs. .incl. of all taxes with fractions of less than fifty
paisa to be rounded off to the preceding rupees and fraction of above 50 paisa and up
to 95 paise to the rounded off to 50 paise.

Principle Display Panel:

Rule 2(h) (ii) provides principle display panel that means total surface area of the
package where the information required to be given as:

- All information could be grouped together and given at one place

- The pre-printed information could be at one place and online grouped at another
place.

Principal display panel-its area, size and letter etc.

Rule 7 provides the height of any numeral in the declaration on the principal display
panel that shall not be less than as shown in Table-I, if the net quantity is declared in
terms of weight or volume and as shown in Table-II, if the net quantity is declared in
terms of length, area or number. It further provides the height of letters in the
declaration that shall not be less than 1 mm height and when blown, formed, molded,
embossed or perforated, shall not be less than 2 mm keeping that the width of the letter
or numeral shall not be less than one third of its height, except in the case of numeral `1'
and letters (i), (I) and (l).

TABLE-I
Minimum height of Net quantity in weight /
Minimum height in mm
numeral Serial Number volume
Normal case When blown, formed, moulded, embossed
 or perforated on container
1 Up to 200g/ ml 1 2
Above 200g/ ml and up
2 2 4
to 500g/ml
3 Above 500g/ ml 4 6
Professional Opportunities Under Legal Metrology Laws

1. Registration as Importer under the Legal Metrology Act 2009

2. Obtaining licences from the Controller of Legal Metrology.
3. Advisory on the weights and measures to be used in the course of business.
4. Advisory on the declarations and particulars to be mentioned on pre-packaged
commodities.
5. Obtaining approval of model of weights and measures before manufacturing or
importing any weight or measure.
6. Verification and stamping of weights or measures at the Government approved
Test Centres.
7. Maintenance of records and registers.
8. Compliance audit.
9. Representation before the concerned authorities on behalf of the client.

Case Laws:

U.P. Petroleum Traders ... vs Union Of India & Ors. on 14 August, 2014:

These intra-court appeals impugn the identical but separate orders, both dated 16th
April, 2014 of dismissal of W.P.(C) No.2021/2014 and W.P.(C) No.1976/2014 preferred
by the appellants respectively. Both the appellants claim to be an association of
petroleum traders of the State of Uttar Pradesh and Haryana respectively, affiliated to
the Consortium of Indian Petroleum Dealers. They filed the writ petitions from which
these appeals arise, averring:

(i) that gross injustice was being caused to the members of the appellants by the oil
companies i.e. Indian Oil Corporation Ltd. (IOCL), Hindustan Petroleum Corporation
Ltd. (HPCL) and Bharat Petroleum Corporation Ltd. (BPCL) impleaded as respondents,
on account of non compliance of mandatory provisions of the Legal Metrology Act, 2009
by the said respondents. Ministry of Petroleum & Natural Gas stated to be having
superintending control over the respondent oil companies was also impleaded as a
respondent;

(ii) that the respondent oil companies were selling / supplying petroleum and diesel by
measuring petroleum and diesel in litres when the Legal Metrology Actprohibits
measure of "mass" in any other unit than in kilogram;
(iii) that "mass" is not equivalent to volume; only 830 grams in weight / mass constitutes
one litre;

(iv) that thus the price paid for one litre is for 830 grams only and not 1000 grams which
is one kilogram;

(v) that the respondent oil companies are however continuing to sell petrol and diesel in
volume instead of on mass, taking advantage of expansion and shrinkage in volume on
account of rise and fall in temperature;

(vi) that there will be no such variation if petrol / diesel is sold by weight;

(vii) that the respondent oil companies and their officers by continuing to sell petrol /
diesel in litres instead of by weight are siphoning off / misappropriating Rs.40 to 45
crores per day;

(viii) that owing to the respondent oil companies failing to adopt the measures as
prescribed in the Legal Metrology Act, the members of the appellants suffer as the
volume of petrol / diesel transported in lorries, exposed to heat, is much larger than
the volume sold by the members of the appellants who store such petrol / diesel
supplied by the respondent oil companies to them in underground tanks where the
temperature is lower, resulting in the volume shrinking;

(ix) that the appellants had earlier filed a complaint before the Monopolies and
Restrictive Trade Practice Commission [substituted by the Competition Appellate
Tribunal (CompAT)] vide enquiry No.75/1992 which was dismissed; Civil Appeal
No.10229/2013 preferred thereagainst to the Supreme Court was also dismissed on
18th November, 2013 granting liberty to the appellants to agitate their grievances before
appropriate forum;

Accordingly, in the writ petitions, direction was sought to the respondent oil companies
to supply petrol / diesel to the members of the appellants on weight basis and
alternatively to give temperature adjustment at the time of preparing invoice of the
dealers and seeking a direction to the Ministry of Petroleum and Natural Gas to ensure
compliance by the respondent oil companies of the provisions of the Legal Metrology
Act. The learned Single Judge dismissed the writ petitions accepting the preliminary
contention of the counsel for the respondent oil companies that the dispute and
difference if any which the members of the appellants had with the respondent oil
companies in this regard was to be resolved by arbitration provided for in the agreement
entered into by each of the said members of the appellants with the respective oil
companies and holding the writ petitions to be not maintainable on this ground; liberty
was however given to agitate the grievance in accordance with the dispute resolution
mechanism provided for in the agreement between the members of the appellants and
the respective oil companies. It was further observed that the liberty given by the
Supreme Court while dismissing the appeal preferred against the order of the CompAT,
was to raise the dispute before the appropriate forum and which was of arbitration and
not under Article 226 of the Constitution of India.

3. The appellants in the memorandums of appeal, rather than addressing the reasoning
given by the learned Single Judge for holding the writ petitions to be not maintainable,
have parrot like repeated the averments in the writ petitions. The counsel for the
appellants also, inspite of our repeated asking as to whether not a direction to the
respondent oil companies as sought to supply petrol / diesel to the members of the
appellants by weight i.e. in kilograms instead of by volume i.e. in litres, would amount to
changing the agreement entered into between the members of the appellants and the
respective oil companies and whether it is permissible and appropriate in exercise of
powers under Article 226 of the Constitution of India to so change the agreement and as
to what would be the consequences of the same on the other terms of the agreement,
did not choose to reply. In fact, inspite of our prodding on the earlier date in this regard,
no copy of the agreements so entered into have even been produced and along with the
memorandums of appeal, only the extract of the arbitration clause in the agreement has
been annexed. We are thus unable to know as to what are the terms of the said
agreement.

4. The counsel for the appellants however invited attention to Harbanslal Sahnia Vs.
Indian Oil Corporation Ltd. AIR 2003 SC 2120 laying down that the rule of exclusion of
writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one
of compulsion.

5. Per contra, the counsel for the respondent HPCL has invited attention to the order
supra of the Supreme Court in appeal preferred against the order of the CompAT.

6. We have perused the order of the CompAT as well as the order of the Supreme
Court in appeal preferred thereagainst. The complainant in the proceeding before the
CompAT is the appellant in LPA No.405/2014. Though the complaint was on the same
grounds as before us, but the CompAT inter alia by referring to the clauses of the
agreement between the members of the appellants and the respective oil companies
held that no case of the respondent oil companies having indulged in any unfair trade
practice was made out. The Supreme Court, while dismissing the appeals held, "the
right of the appellant association obviously is guided by the terms and conditions of the
agreement entered into between the members of the association and the respondents
and therefore this Court finds no reason to entertain the grievance raised by the
appellant." In the face of the said reasoning of the CompAT and the Supreme Court as
well as the learned Single Judge of this Court in dismissing the writ petitions from which
these appeals arise, it was incumbent upon the appellants to demonstrate to us that the
relief claimed in the writ petitions and in these appeals would not tantamount to
changing the agreement and / or will have no impact on the agreement. Till the
appellants succeed in doing so, they cannot, relying on Harbanslal Sahnia (supra), urge
that inspite of the contractual remedy, they are entitled to invoke Article 226. The
Supreme Court, in The Rajasthan State Industrial Development and Investment
Corporation Vs. Diamond and Gem Development Corporation Ltd. (2013) 5 SCC 470
reiterated the settled legal proposition that matters/disputes relating to contract cannot
be agitated nor terms of contract can be enforced through writ jurisdiction under Article
226 of the Constitution.

We are conscious that the appellants have based their case in these proceedings on
the provisions of the Legal Metrology Act. However we are not satisfied that the contract
of the members of the appellants with the respondent oil companies would remain
unaffected from the reliefs claimed in these proceedings. In fact, at one point of time
when the counsel for the appellants argued that the contract to sell and purchase petrol
/ diesel in litres is contrary to the Legal Metrology Act, we had enquired whether not the
same would have the effect of making the contract void / voidable. We reiterate that we
in these proceedings, cannot issue a direction to the respondent oil companies to, under
their contract, supply diesel / petrol tothe members of the appellants by weight without
being satisfied that the same will not affect the other terms and conditions of the said
contract and which the appellants have chosen not to place before us.

8. We may note that it is also the contention of the counsel for the respondent HPCL
that this Court also does not have the territorial jurisdiction to entertain the writ petitions
as the appellant in LPA No.405/2014 is an association of the petroleum traders of the
State of Uttar Pradesh and the appellant in LPA No.406/2014 is an association of
petroleum traders of the State of Haryana and whose retail outlets are in the States of
Uttar Pradesh and Haryana. Reliance in this regard is placed on Kusum Ingots & Alloys
Ltd. Vs. Union of India (2004) 6 SCC 254, Oil and Natural Gas Commission Vs. Utpal
Kumar Basu (1994) 4 SCC 711 and Sterling Agro Industries Ltd. Vs. Union of India AIR
2011 Delhi 174.

9. Though the aforesaid two reasons are sufficient to dismiss these appeals but we find
that the appellants even under the Legal Metrology Act have failed to make out any
case. Their entire case is based on:

(i) that vide Section 4, every unit of weight or measure has to be in accordance with the
metric system based on international system of units;

(ii) that the base unit of mass, as per Section 5, is kilogram;

(iii) that Sections 11 & 12 prohibit use of any other unit than the standard units of weight
and measure;

(iv) that litre is not the base unit of mass;

(v) that weight/mass can never be equivalent to volume, which changes with
temperature;
(vi) that the respondent oil companies are using dip rod method for measuring petrol
and diesel and which is not an approved method under the Act for measurement of
mass;
(vii) that the respondent oil companies are contravening the mandatory provisions of the
Act.

However, though Section 4 of the Act provides that every unit of weight or measure
shall be in accordance with the metric system based on the international system of units
but the appellants have not explained the basis of their presumption that the unit of litre
as a measure of volume is not in accordance with the metric system or is not based on
the international system of units. The Act and the Legal Metrology (General) Rules,
2011 framed thereunder are not found to define, what is the "metric system" or what is
the "international system of units". The appellants also have not bothered to pay any
attention thereto. The "Metric System" is defined in the Blacks Law Dictionary Eighth
Edition as "a decimal system for measuring length, weight, area or volume based on the
meter as a unit length and the kilogram as a unit mass". We have wondered as to why,
litre cannot be said to be a part of the decimal system of measurement inasmuch as it
satisfies the requirement of being based on meter as a unit i.e. 1 litre is equal to 10-
3m3. Similarly, neither the Act nor the Legal Metrology (General) Rules define the
International System of Units. We however find that the Legal Metrology (National
Standards) Rules, 2011 also framed under the Legal Metrology Actin Rule 3 thereof
read with Rules 2 (d), (e) and (h) thereof refer to the International System of Units (SI)
evolved by the Bureau International des Poids et Mesures (International Bureau of
Weights & Measures) (BIPM) set up by the Metre Convention signed in Paris on 20 th
May, 1875 to ensure worldwide unification of measurements. The BIPM publishes a
document known as the "SI Brochure" which defines and presents the International
System of Units. Clause 2 of the 8 th Edition, 2006 (updated in 2014) of the said
Brochure reports that there are Seven units upon which the most accurate and
reproducible measurements can be made and which are known as Base Units. The said
seven Base Units are

(i) metre as a unit of length; (ii) kilogram as a unit of mass; (iii) second as a unit of time;
(iv) ampere as a unit of electricity; (v) kelvin as a unit of thermodynamic temperature;
(vi) candela as a unit of luminous intensity; and (vii) mole as a unit of amount of
substance. However, the said Brochure besides the said Base Units, also refers to
Derived Units (which are products of powers of Base Units) and Clause 4 of the said
Brochure refers to " units outside the SI" as some of the Non-SI units which still appear
in the scientific, technical and commercial literature and will continue to be used for
years owing to their historic importance. It further lists the non-SI units which are
accepted for use with the international system because they are widely used with the SI
in matters of everyday life and because their use is expected to continue indefinitely and
yet further because they have an exact definition in terms of an SI Unit. The said list
includes the unit of litre as a measure of volume and gives the value of a litre in SI units
as:

1. "1 L = 1 l = 1 dm3 = 10 cm3 = 10-3 m3"

2. Infact, the said Brochure also refers to the 12th General Conference on Weights
and Measures of the year 1964 (also see Rule 3 read with Rule 2(d) of the Legal
 Metrology (National Standards) Rules, 2011) which declared that the word 'litre'
maybe employed as a special name for the cubic decimetre (dm3).
3. It thus follows that litre though not an SI unit has been accepted by the BIPM for
use with the SI Units under the International System of Units. It would further
follow that litre is a unit of measure in accordance with the Metric System based
on the International System of Units, within the meaning of section 4 of the Legal
Metrology Act.

Section 5(1) of the Act lists the same Base Units as under the SI and in which as
aforesaid litre is not included. However, Section 5(2) provides that "the specifications of
the base units mentioned in sub-section (1), derived units and other units shall be such
as may be prescribed." Again, though the Act and the Legal Metrology (General) Rules
are not found to explain as to what are "derived units and other units" within the
meaning of Section 5(2), but the Legal Metrology (National Standards) Rules supra,

(i) in Rule 2(c) define derived units on the same lines as under the SI Brochure
aforesaid;

(ii) Rule 2(h) further explains that SI is divided into three classes of units i.e. Base Units,
Derived Units and Supplementary Units; and,

(iii) Rule 2(i) defines "permitted units" as units which though not part of SI are
recognized and permitted by the CGPM/International System of Units for use along with
SI units.

It thus follows that the Legal Metrology Act has expressly admitted to use of litre as a
measure of volume. Rather the Fourth Schedule to the said Rules listing "Units
permitted to be used to with base, supplementary or derived units" specifies that the
permitted unit of volume shall be litre and that "1 L = 1 l = 1 dm3 = 10 cm3 = 10-3 m3".

12. The argument of the appellants, of petrol/diesel being measurable only in mass, the
unit of which is kilogram is also incomprehensible. Mass again is not defined, neither in
the Act nor in the Rules. Mass is defined in the Concise Oxford English Dictionary,
Tenth Edition as "the quantity of matter which a body contains". However, Rule 13 of
the Legal Metrology (General) Rules provide that every measuring instrument shall
conform to the details specified in the Eighth Schedule thereof. Part IV of the Eighth
Schedule titled "Measuring System for Liquids Other Than Water" provides for
measurement of liquids other than water, by volume. The same thus runs counter to the
argument of the appellants that the measure of liquids has to be by mass only. Again,
while providing the extent of error in measurement of such liquids, measurements are
given in litres which is also indicative of the measurement in litres being within the
domain of the legal metrology system.

13. Reference may also be made to Rule 12 of the Legal Metrology (Packaged
Commodities) Rules, 2011 which in Clause (2)(a) provides that except in the cases of
commodities specified in the Fourth Schedule of the Rules, the declaration of the
quantity shall be in terms of the unit of mass if the commodity is solid, semi-solid,
viscous or a mixture of solid and liquid and which is again indicative of the reference to
measurement in units of mass in the Act being to solids, semi-solids, viscous or mixture
of solid and liquid. Rule 12(2)(d) categorically provides that the declaration of the
quantity shall be in terms of the unit of volume, if the commodity is liquid or is sold by
cubic measure. The Fourth Schedule to the said Rules provides that Industrial Diesel
Fuel is to be measured in terms of volume, though again it does not refer topetrol and
diesel or so with which we are concerned but is again indicative of the measurement in
volume in litres being very much in the domain of standard units with which the legal
metrology system is concerned.

14. The purport of our above discussion is not to categorically hold either way inasmuch
as we have had no assistance as aforesaid, from either of the counsels in the said
respect. The purport of this discussion is only to show that if at all the grievance of the
appellants is genuine, the proper forum if not arbitration as above suggested, would be
the authorities under the Legal Metrology Act itself. Chapter V of the Act deals with
offences and penalties and if at all the respondent oil companies are violating the
provisions of the Act, the remedy of the appellants would be to file a complaint thereof
within the ambit of the Act before the authorities constituted under the Act and who
being adept in every aspect of the subject, would be better equipped to deal therewith.

15. As far as the grievance of the appellants of use by the respondent oil companies of
the dip-rod method is concerned, we find that Rule 14 of the Legal Metrology (General)
Rules provides that the procedure for carrying out calibration of vehicle tanks etc. as
may be specified in the Ninth Schedule thereto. The Ninth Schedule itself, while
referring to maximum permissible error, refers to the capacity of vehicle tanks in litre;
not only so, it also provides the detailed procedure for measurement by dip-rod method.
We have wondered that when the Rules framed under the Act themselves are providing
for measurement of vehicle tanks in litres, how can it be said that the unit of litre being
used by the respondent oil companies is in contravention of the Act.

16. We therefore do not find any merit in these appeals. The appeals are accordingly
dismissed.

An Act to provide for the establishment of a Bureau for the harmonious development of the
activities of standardisation, marking and quality certification of goods and for matters connected
therewith or incidental thereto.
Bureau of Indian Standards Act, 1986.

2. In this Act, unless the context otherwise requires, -

a. "article" means (as respects standardisation and marking) any substance,

artificial or natural, or partly artificial or partly natural, whether raw or partly or
wholly processed or manufactured;
b. "Bureau" means the Bureau of Indian Standards established under section 3 ;
c. "consumer" means a consumer of any article or process ;
d. "covering" includes any stopper, cask, bottle, vessel, box, crate, cover, capsule,
case, frame, wrapper or other container;
e. "Executive Committee" means the Executive Committee constituted under sub-
section (1) of section 4;
f. "Fund" means the Fund constituted under section 18;
g. "Indian Standard" means the standard (including any tentative or provisional
standard) established and published by the Bureau, in relation to any article or
process indicative of the quality and specification of such article or process and
includes -
i. any standard recognised by the Bureau under clause (b) of section 10;
and
ii. any standard established and published, or recognised, by the Indian
Standards Institution and which is in force immediately before the date of
establishment of the Bureau;
h. "Indian Standards Institution" means the Indian Standards Institution set up
under the Resolution of the Government of India in the late, Department of
Industries and Supplies No. 1 Std.(4)/45, dated the 3rd day of September, 1946,
and registered under the Societies Registration Act, 1860;
i. "inspecting officer" means an inspecting officer appointed under section 25;
j. "Licence" means a licence granted under section 15 to use the Indian Standards
Certification Mark in relation to any article or process which conforms to the
Indian Standard and includes any licence granted under the Indian Standards
Institution (Certification Marks) Act, 1952 and is in force immediately before the
date of establishment of the Bureau;
k. "manufacturer" means the manufacturer of any article or process;
l. "mark" includes a device, brand, heading, label, ticket,. pictorial representation,
name, signature, word, letter or numeral or any combination thereof;
m. "member" means a member of the Bureau;
n. "prescribed" means prescribed by rules made under this Act;
o. "Process" includes any practice, treatment and mode of manufacture of any
article;
p. "registering authority" means any authority competent under any law for the time
being in force to register any company, firm or other body of persons, or any
trade mark or design, or to grant a patent;
q. "regulations" means regulations made by the Bureau under this Act;
r. "rules" means rules made by the Central Government under this Act;
 s. "Specification" means a description of an article or process as far as practicable
by reference to its nature, quality, strength, purity, composition, quantity,
dimensions, weight, grade, durability, origin, age, material, mode of manufacture
or other characteristics to distinguish it from any other article or process;
t. "Standard Mark" means the Bureau of Indian Standards Certification Mark
specified by the Bureau to represent a particular Indian Standard and also
includes any Indian Standards Institution Certification Mark specified by the
Indian Standards Institution;
u. "trade mark" means a mark used or proposed to be used in relation to goods for
the purpose of indicating, or so as to indicate, a connection in the course of trade
between the goods and some person having the right, either as proprietor or as
registered user, to use the mark, whether with or without any indication of the
identity of that person;
v. an article is said to be marked with a Standard Mark if the article itself is marked
with a Standard Mark or any covering containing, or label attached to, such
article is so marked.

THE BUREAU OF INDIAN STANDARDS

3. (1) With effect from such date as the Central Government may, by notification in the
Official Gazette, appoint in this behalf, there shall be established for the purposes of this
Act, a Bureau, to be called the Bureau of Indian Standards.

(2) The Bureau shall be a body corporate by the name aforesaid, having perpetual
succession and a common seal, with power, subject to the provisions of this Act, to
acquire, hold and dispose of property, both movable and immovable, and to contract
and shall by the said name sue and be sued.

(3) The Bureau shall consist of the following members, namely :-

a. the Minister incharge of the Ministry or Department of the Central Government

having administrative control of the Bureau who shall be ex-officio President of
the Bureau;
b. The Minister of State or a Deputy Minister, if any, in the Ministry or Department of
the Central Government having administrative control of the Bureau who shall
be ex-officio vice-President of the Bureau, and where there is no such Minister of
State or Deputy Minister, such person as may be nominated by the Central
Government to be the Vice-President of the Bureau;
c. the Secretary to the Government of India in charge of the Ministry or Department
of the Central Government having administrative control of the Bureau ex-officio;
d. the Director-General of the Bureau ex-officio;
e. such number of other persons, to represent the Government, industry, scientific
and research institutions and other interests, as may be prescribed, to be
appointed by the Central Government.
(4) The term of office of the members referred to in clause (e) of sub-section (3) and the
manner of filling vacancies among, and the procedure to be followed in the discharge of
their functions by, the members, shall be such as may be prescribed.

(5) The Bureau may associate with itself, in such manner and for such purposes as may
be prescribed, any persons whose assistance or advice it may desire in complying with
any of the provisions of this Act and a person so associated shall have the right to take
part in the discussions of the Bureau relevant to the purposes for which he has been
associated but shall not have the right to vote.

4. (1) The Bureau may, with the prior approval of the Central Government, by
notification in the Official Gazette, constitute an Executive Committee which shall
consist of the following members, namely:-

a. Director-General of the Bureau, who shall be its ex-officio Chairman;

b. such number of members, as may be prescribed.

(2) The Executive Committee constituted under sub-section (1) shall perform, exercise
and discharge such of the functions, powers and duties of the Bureau as may be
delegated to it by the Bureau.

5. (1) Subject to any regulations made in this behalf, the Bureau may, from time to time
and as and when it is considered necessary, constitute the following Advisory
Committees for the efficient discharge of its functions, namely:-

a. Financial Committee;
b. Certification Advisory Committee;
c. Standards Advisory Committee;
d. Laboratory Advisory Committee;
e. Planning and Development Advisory Committees;
f. such number of other committees as may be determined by regulations.

(2) Each Advisory Committee shall consist of a Chairman and such other members as
may be determined by regulations.

(3) Without prejudice to the powers contained in sub-section (1), the Bureau may
constitute, as and when considered necessary, such number of technical committees of
experts for the formulation of standards in respect of articles or processes.

6. No act or proceedings of the Bureau, the Executive Committee or any Committee

constituted under section 5 shall be invalid merely by reason of :-

a. any vacancy in, or any defect in the constitution of the Bureau or the Committee;
or
b. any defect in the appointment of a person acting as a member of the Bureau or
Committee; or
 c. any irregularity in the procedure of the Bureau or the Committee not affecting the
merits of the case.

7. (1) The Central Government shall appoint a Director-General of the Bureau.

(2) The terms and conditions of service of the Director-General of the Bureau shall be
such as may be prescribed.

(3) Subject to the general superintendence and control of the Bureau, the Director-
General of the Bureau shall be the Chief Executive Authority of the Bureau.

(4) The Director-General of the Bureau shall exercise and discharge such of the powers
and duties of the Bureau as may be determined by regulations.

8. (1) The Bureau may appoint such other officers and employees as it considers
necessary for the efficient discharge of its functions under this Act.

(2) The terms and conditions of service of officers and employees of the Bureau
appointed under sub-section (1) shall be such as may be determined by regulations.

TRANSFER OF ASSETS, LIABILITIES, ETC. OF THE INDIAN STANDARDS

INSTITUTION TO THE BUREAU

9. (1) On and from the date of establishment of the Bureau, -

a. any reference to the Indian Standards Institution in any law other than this Act or
in any contract or other instrument shall be deemed as a reference to the
Bureau;
b. all properties and assets, movable and immovable, of, or belonging to, the Indian
Standards Institution shall vest in the Bureau;
c. all the rights and liabilities of the Indian Standards Institution shall be transferred
to, and be the rights and liabilities of, the Bureau;
d. without prejudice to the provisions of clause (c), all debts, obligations and
liabilities incurred, all contracts entered into and all matters and things engaged
to be done by, with or for the Indian Standards Institution immediately before that
date, for or in connection with the purposes of the said Institution shall be
deemed to have been incurred, entered into, or engaged to be done by, with or
for, the Bureau;
e. all sums of money due to the Indian Standards Institution immediately before that
date shall be deemed to be due to the Bureau;
f. all suits and other legal proceedings instituted or which could have been
instituted by or against the Indian Standards Institution immediately before that
date may be continued or may be instituted by or against the Bureau; and
g. every employee holding any office under the Indian Standards Institution
immediately before that date shall hold his office in the Bureau by the same
tenure and upon the same terms and conditions of service as respects
 remuneration, leave, provident fund, retirement or other terminal benefits as he
would have held such office if the Bureau had not been established and shall
continue to do so as an employee of the Bureau or until the expiry of a period of
six months from that date if such employee opts not to be the employee of the
Bureau within such period.

(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947 or in any
other law for the time being in force, the absorption of any employee by the Bureau in its
regular service under this section shall not entitle such employee to any compensation
under that Act or other law and no such claim shall be entertained by any court, tribunal
or other authority.

POWERS AND FUNCTIONS OF THE BUREAU

10. (1) The Bureau may exercise such powers and perform such duties as may be
assigned to it by or under this Act and, in particular, such powers include the power to -

a. establish, publish and promote in such manner as may be prescribed the Indian
Standard, in relation to any article or process;
b. recognise as an Indian Standard, in such manner as may be prescribed, any
standard established by any other Institution in India or elsewhere, in relation to
any article or process;
c. specify a Standard Mark to be called the Bureau of Indian Standards Certification
Mark which shall be of such design and contain such particulars as may be
prescribed to represent a particular Indian Standard;
d. grant, renew, suspend or cancel a licence for the use of the Standard Mark;
e. levy fees for the grant or renewal of any licence;
f. make such inspection and take such samples of any material or substance as
may be necessary to see whether any article or process in relation to which the
Standard Mark has been used conforms to the Indian Standard or whether the
Standard Mark has been improperly used in relation to any article or process with
or without a licence;
g. seek recognition of the Bureau and of the Indian Standards outside India on such
terms and conditions as may be mutually agreed upon by the Bureau with any
corresponding institution or organisation in any country;
h. establish, maintain and recognise laboratories for the purposes of
standardisation and quality control and for such other purposes as may be
prescribed;
i. undertake research for the formulation of Indian Standards in the interests of
consumers and manufacturers;
j. recognise any institution in India or outside which is engaged in the
standardisation of any article or process or the improvement of the quality of any
article or process;
k. provide services to manufacturers and consumers of articles or processes on
such terms and conditions as may be mutually agreed upon;
 l. appoint agents in India or outside India for the inspection, testing and such other
purposes as may be prescribed;
m. establish branches, offices or agencies in India or outside;
n. inspect any article or process, at such times and at such places as may be
prescribed in relation to which the Standard Mark is used or which is required to
conform to the Indian Standard by this Act or under any other law irrespective of
whether such article or process is in India or is brought or intended to be brought
into India from a place outside India;
o. coordinate activities of any manufacturer or association of manufacturers or
consumers engaged in standardisation and in the improvement of the quality of
any article or process or in the implementation of any quality control activities;
p. perform such other functions as may be prescribed.

(2) The Bureau shall perform its functions under this section in accordance with, and
subject to, such rules as may be made by the Central Government.

11. (1) No person shall use, in relation to any article or process, or in the title of any
patent, or in any trade mark or design the Standard Mark or any colourable imitation
thereof, except under a licence.

(2) No person shall, notwithstanding that he has been granted a licence, use in relation
to any article or process the Standard Mark or any colourable imitation thereof unless
such article or process conforms to the Indian Standard.

12. No person shall, except in such cases and under such conditions as may be
prescribed, use without the previous permission of the Bureau, -

a. any name which so nearly resembles the name of the Bureau as to deceive or
likely to deceive the public or which contains the expression "Indian Standard" or
any abbreviation thereof; or
b. any mark or trade mark in relation to any article or process containing the
expressions "Indian Standard" or "Indian Standard Specification" or any
abbreviation of such expressions.

13. (1) Notwithstanding anything contained in any law for the time being in force, no
registering authority shall -

a. register any company, firm or other body of persons which bears any name or
mark; or
b. register a trade mark or design which bears any name or mark; or
c. grant a patent, in respect of an invention, which bears a title containing any name
or mark

if the use of such name or mark is in contravention of section 11 or section 12.

(2) If any question arises before a registering authority whether the use of any name or
mark is in contravention of section 11 or section 12, the registering authority may refer
the question to the Central Government whose decision thereon shall be final.

14. If the Central Government, after consulting the Bureau, is of the opinion that it is
necessary or expedient so to do, in the public interest, it may, by order published in the
Official Gazette, -

a. notify any article or process of any scheduled industry which shall conform to the
Indian Standard; and
b. direct the use of the Standard Mark under a licence as compulsory on such
article or process.

Explanation - For the purposes of this section, the expression "scheduled industry" shall
have the meaning assigned to it in the Industries (Development and Regulation) Act,
1951.

LICENCE

15. (1) The Bureau may, by order, grant, renew, suspend or cancel a licence in such
manner as may be determined by regulations.

(2) The grant or renewal of the licence under sub-section (1) shall be subject to such
conditions and on payment of such fees as may be determined by regulations.

16. (1) Any person aggrieved by an order made under section 15 may prefer an appeal
to the Central Government within such period as may be prescribed.

(2) No appeal shall be admitted if it is preferred after the expiry of the period prescribed
therefor :

Provided that an appeal may be admitted after the expiry of the period prescribed
therefor if the appellant satisfies the Central Government that he had sufficient cause for
not preferring the appeal within the prescribed period.

(3) Every appeal made under this section shall be made in such form and shall be
accompanied by a copy of the order appealed against and by such fees as may be
prescribed.

(4) The procedure for disposing of an appeal shall be such as may be prescribed :

Provided that before disposing of an appeal, the appellant shall be given a reasonable
opportunity of being heard.

FINANCE, ACCOUNTS AND AUDIT

17. The Central Government may, after due appropriation made by Parliament by law in
this behalf, make to the Bureau grants and loans of such sums of money as that
Government may consider necessary.

18. (1) There shall be constituted a Fund to be called the Bureau of Indian Standards
Fund and there shall be credited thereto -

a. any grants and loans made to the Bureau by the Central Government under
section 17;
b. all fees and charges received by the Bureau under this Act;
c. all sums received by the Bureau from such other sources as may be decided
upon by the Central Government.

(2) The Fund shall be applied for meeting -

a. the salary, allowances and other remuneration of the members, Director-General,

officers and other employees of the Bureau;
b. expenses of the Bureau in the discharge of its functions under section 10;
c. expenses on objects and for purposes authorised by this Act.

19. (1) The Bureau may, with the consent of the Central Government or in accordance
with the terms of any general or special authority given to it by the Central Government,
borrow money from any source as it may deem fit for discharging all or any of its
functions under this Act.

(2) The Central Government may guarantee in such manner as it thinks fit, the
repayment of the principal and the payment of interest thereon with respect to the loans
borrowed by the Bureau under sub-section (1).

20. The Bureau shall prepare, in such form and at such time in each financial year as
may be prescribed, its budget for the next financial year, showing the estimated receipts
and expenditure of the Bureau and forward the same to the Central Government.

21. The Bureau shall prepare, in such form and at such time in each financial year as
may be prescribed, its annual report, giving a full account of its activities during the
previous financial year, and submit a copy thereof to the Central Government.

22. (1) The Bureau shall maintain proper accounts and other relevant records and
prepare an annual statement of accounts, in such form as may be prescribed by the
Central Government in consultation with the Comptroller and Auditor General of India.

(2) The accounts of the Bureau shall be audited by the Comptroller and Auditor-General
of India at such intervals as may be specified by him and any expenditure incurred in
connection with such audit shall be payable by the Bureau to the Comptroller and
Auditor-General.
(3) The Comptroller and Auditor-General of India and any person appointed by him in
connection with the audit of the accounts of the Bureau shall have the same rights and
privileges and the authority in connection with such audit as the Comptroller and
Auditor-General generally has in connection with the audit of Government accounts
and, in particular, shall have the right to demand the production of books, accounts,
connected vouchers and other documents and papers and to inspect any of the offices
of the Bureau.

(4) The accounts of the Bureau as certified by the Comptroller and Auditor-General of
India or any other person appointed by him in this behalf together with the audit report
thereon shall be forwarded annually to the Central Government and that Government
shall cause the same to be laid before each House of Parliament.

23. The Central Government shall cause the annual report to be laid, as soon as may
be after it is received, before each house of Parliament.

MISCELLANEOUS

24. (1) Without prejudice to the foregoing provisions of this Act, the Bureau shall, in the
exercise of its powers or the performance of its functions under this Act, be bound by
such directions on questions of policy as the Central Government may give in writing to
it from time to time :

Provided that the Bureau shall, as far as practicable, be given an opportunity to express
its views before any direction is given under this sub-section.

(2) The decision of the Central Government whether a question is one of policy or not
shall be final.

25. (1) The Bureau may appoint as many inspecting officers as may be necessary for
the purpose of inspecting whether any article or process in relation to which the
Standard Mark has been used conforms to the Indian Standard or whether the Standard
Mark has been properly used in relation to any article or process with or without licence,
and for the purpose of performing such other functions as may be assigned to them.

(2) Subject to any rules made under this Act, an inspecting officer shall have power to -

(a) inspect any operation carried on in connection with any article or process in relation
to which the Standard Mark has been used; and

(b) take samples of any article or of any material or substances used in any article or
process, in relation to which the Standard Mark has been used.

(3) Every inspecting officer shall be furnished by the Bureau with a certificate of
appointment as an inspecting officer and the certificate shall, on demand, be produced
by the inspecting officer.
26. (1) If the inspecting officer has reason to believe that any article or process in
relation to which the contravention of section 11 or section 12 has taken place are
secreted in any place, premises or vehicles, he may enter into and search such place,
premises or vehicle for such article or process.

(2) Where, as a result of any search made under sub-section (1), any article or process
has been found in relation to which contravention of section 11 or section 12 has taken
place, he may seize such article and other things which, in his opinion, will be useful for,
or relevant to, any proceeding under this Act :

Provided that where it is not practicable to seize any such article or thing, the inspecting
officer may serve on the owner an order that he shall not remove, part with, or otherwise
deal with, the article or things except with the previous permission of the inspecting
officer.

(3) The provision of the Code of Criminal Procedure, 1973, relating to searches and
seizures shall, so far as may be, apply to every search or seizure made under this
section.

27. The Bureau may, by general or special order in writing, delegate to any member,
member of the Executive Committee, officer of the Bureau or any other person subject
to such conditions, if any, as may be specified in the order, such of its powers and
functions under this Act (except the powers under section 38) as it may deem
necessary.

28. Every licensee shall supply the Bureau with such information, and with such
samples of any material or substance used in relation to any article or process, as the
Bureau may require.

29. Noting in this Act shall exempt any person from any suit or other proceeding which
might, apart from this Act, be brought against him.

30. Any information obtained by an inspecting officer or the Bureau from any statement
made or information supplied or any evidence given or from inspection made under the
provisions of this Act shall be treated as confidential :

Provided that nothing in this section shall apply to the disclosure of any information for
the purpose of prosecution under this Act.

31. All members, officers and other employees of the Bureau shall be deemed, when
acting or purporting to act in pursuance of any of the provisions of this Act, to be public
servants within the meaning of section 21 of the Indian Penal Code.

32. No suit, prosecution or other legal proceeding shall lie against the Government or
any officer of the Government or any member, officer or other employee of the Bureau
for anything which is in good faith done or intended to be done under this Act or the
rules or regulations made thereunder.

33. (1) Any person who contravenes the provisions of section 11, or section 12 or
section 14 or section 15 shall be punishable with imprisonment for a term which may
extend to one year or with fine which may extend to fifty thousand rupees, or with both.

(2) Any court trying a contravention under sub-section (1) may direct that any property
in respect of which the contravention has taken place shall be forfeited to the Bureau.

34. (1) No court shall take cognizance of any offence punishable under this Act save on
a complaint made by or under the authority of the Government or Bureau or by any
officer empowered in this behalf by the Government or the Bureau, or any consumer or
any association recognised in this behalf by the Central or State Government.

(2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the

first class specially empowered in this behalf shall try any offence punishable under this
Act.

35. (1) Where an offence under this Act has been committed by a company, every
person who at the time the offence was committed was in charge of, and was
responsible to, the company for the conduct of the business of the company, as well as
the company, shall be deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly :

Provided that nothing contained in this sub-section shall render any such person liable
to any punishment provided in this Act, if he proves that the offence was committed
without his knowledge or that he had exercised all due diligence to prevent the
commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this
Act has been committed by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to any neglect on the part
of, any director, manager, secretary or other officer of the company, such director,
manager, secretary or other officer shall also be deemed to be guilty of that offence and
shall be liable to be proceeded against and punished accordingly.

Explanation - For the purposes of this section, -

a. "company" means any body corporate and includes a firm or other association of
individuals; and
b. "director", in relation to a firm, means a partner in the firm.

36. All orders and decisions of, and all other instruments issued by, the Bureau shall be
authenticated by the signature of such officer or officers as may be authorised by the
Bureau in this behalf.
37. (1) The Central Government may, by notification in the Official Gazette, make rules
for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such
rules may provide for all or any of the following matters, namely :-

a. the number of members of the Bureau and the interest such members would
represent under clause (e) of sub-section (3) of section 3;
b. the term of office of the members of the Bureau, the manner for filling vacancies
and the procedure to be followed in the discharge of their functions by, the
members under sub-section (4) of section 3;
c. the manner in, and the purposes for, which the Bureau may associate with itself
any person for assistance and advice under sub-section (5) of section 3;
d. the number of members of the Bureau who will be members of the Executive
Committee under clause (b) of sub-section (1) of section 4;
e. the terms and conditions of service of the Director-General of the Bureau under
sub-section (2) of section 7;
f. the design and the particulars to represent a particular Indian Standard under
clause (c) of sub-section (1) of section 10;
g. the purposes for which laboratories for the purposes of standardisation and
quality control shall be established by the Bureau under clause (h), of sub-
section (1) of section 10;
h. the purposes for which agents may be appointed by the Bureau in India or
outside India under clause (1) of sub-section (1) of section 10;
i. the times and places at which any article or process may be inspected under
clause (n) of sub-section (1) of section 10;
j. the additional functions that may be performed by the Bureau under section 10;
k. the cases in which, and the conditions subject to which, exemption may be
granted under section 12;
l. the form in which, and the time at which, the Bureau shall prepare its budget
under section 20 and its annual report under section 21;
m. the manner in which the accounts of the Bureau shall be maintained under
section 22;
n. the conditions subject to which inspecting officer may exercise his powers under
sub-section (2) of section 25;
o. any other matter which is to be, or may be, prescribed, or in respect of which
provision is to be, or may be, made by rules.

38. (1) The Executive Committee may, with the previous approval of the Central
Government, by notification in the Official Gazette, make regulations consistent with this
Act and the rules generally to carry out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such
regulations may provide for all or any of the following matters, namely :-

a. the members of the Advisory Committees constituted under section 5 ;

 b. the powers and duties that may be exercised and discharged by the Director-
General of the Bureau under sub-section (4) of section 7;
c. the terms and conditions of service of officers and employees of the Bureau
under sub-section (2) of section 8;
d. the manner of grant, renewal, suspension or cancellation of licence under sub-
section (1) of section 15;
e. the conditions subject to which a licence may be granted or renewed and the
fees payable therefor under sub-section (2) of section 15.

39. Every rule and every regulation made under this Act shall be laid, as soon as may
be after it is made, before each House of Parliament, while it is in session, for a total
period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid, both Houses agree in making any
modification in the rule or regulation or both Houses agree that the rule or regulation
should not be made, the rule or regulation shall thereafter have effect only in such
modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything
previously done under that rule or regulation.

40. Nothing in this Act shall affect the operation of the Agricultural Produce (Grading
and Marking) Act, 1937 or the Drugs and Cosmetics Act, 1940, or any other law for the
time being in force, which deals with any standardisation or quality control of any article
or process.

41. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central
Government may, by order, published in the Official Gazette, make such provisions not
inconsistent with the provisions of this Act as may appear to be necessary for removing
the difficulty :-

Provided that no order shall be made under this section after the expiry of five years
from the commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is
made, before each House of Parliament.

42. (1) The Indian Standards Institution (Certification Marks) Act, 1952, is hereby
repealed.

(2) Notwithstanding such repeal, anything done or any action taken or purported to have
done or taken (including any rule, regulation, notification, scheme, specification, Indian
Standard, Standard Mark, inspection order or notice made, issued or adopted, or any
appointment, or declaration made or any licence, permission, authorisation or
exemption granted or any document or instrument executed or direction given or any
proceedings taken or any penalty or fine imposed) under the Act hereby repealed shall,
in so far as it is not inconsistent with the provisions of this Act, be deemed to have been
done or taken under the corresponding provisions of this Act.

(3) The mention of particular matters in sub-section (2) shall not be held to prejudice or
affect the general application of section 6 of the General Clauses Act, 1897 with regard
to the effect of repeal
UNIT II ADULTRATION

THE PREVENTION OF FOOD ADULTERATION ACT, 1954

An Act to make provision for the prevention of adulteration of food.

2. Definitions In this Act unless the context otherwise requires,

(i) "adulterant" means any material which is or could be employed for the purposes of
adulteration;

(ia) "adulterated"an article of food shall be deemed to be adulterated (a) if the

article sold by a vendor is not of the nature, substance or quality demanded by the
purchaser and is to his prejudice, or is not of the nature, substance or quality which it
purports or is represented to be; (b) if the article contains any other substance which
affects, or if the article is so processed as to affect, injuriously the nature, substance or
quality thereof; (c) if any inferior or cheaper substance has been substituted wholly or in
part for the article so as to affect injuriously the nature, substance or quality thereof; (d)
if any constituent of the article has been wholly or in part abstracted so as to affect
injuriously the nature, substance or quality thereof ; (e) if the article had been prepared,
packed or kept under insanitary conditions whereby it has become contaminated or
injurious to health; (f) if the article consists wholly or in part of any filthy, putrid, , rotten,
decomposed or diseased animal or vegetable substance or is insect-infested or is
otherwise unfit for human consumption; (g) if the article is obtained from a diseased
animal; (h) if the article contains any poisonous or other ingredient which renders it
injurious to health; (i) if the container of the article is composed, whether wholly or in
part, of any poisonous or deleterious substance which renders its contents injurious to
health; (j) if any colouring matter other than that prescribed in respect thereof is present
in the article, or if the amounts of the prescribed colouring matter which is present in the
article are not within the prescribed limits of variability; (k) if the article contains any
prohibited preservative or permitted preservative in excess of the prescribed limits; (l) if
the quality or purity of the article falls below the prescribed standard or its constituents
are present in quantities not within the prescribed limits of variability, but which renders
it injurious to health; (m) if the quality or purity of the article falls below the prescribed
standard or its constituents are present in quantities not within the prescribed limits of
variability but which does not render it injurious to health: Provided that, where the
quality or purity of the article, being primary food, has fallen below the prescribed
standards or its constituents are present in quantities not within the prescribed limits of
variability in either case, solely due to natural causes and beyond the control of human
agency, then, such article shall not be deemed to be adulterated within the meaning of
this sub-clause. 3 Explanation Where two or more articles of primary food are mixed
together and the resultant article of food (a) is stored, sold or distributed under a
name which denotes the ingredients thereof; and (b) is not injurious to health, then,
such resultant article shall not be deemed to be adulterated within the meaning of this
clause;

(ii) "Central Food Laboratory" means any laboratory or institute established or specified
under section 4;

(iii) "Committee" means the Central Committee for Food Standards constituted under
section 3;

(iv) "Director of the Central Food Laboratory" means the person appointed by the
Central Government by notification in the Official Gazette as the Director of the Central
Food Laboratory and includes any person appointed by the Central Government in like
manner to perform all or any of the functions of the Director under this Act: Provided
that no person who has any financial interest in the manufacture, import or sale of any
article of food shall be appointed to be a Director under this clause ;

(v) "food" means any article used as food or drink for human consumption other than
drugs and water and includes (a) any article which ordinarily enters into, or is used in
the composition or preparation of, human food, (b) any flavouring matter or condiments,
and (c) any other article which the Central Government may, having regard to its use,
nature, substance or quality, declare, by notification in the Official Gazette, as food for
the purposes of this Act;

(vi) "Food (Health) Authority" means the Director of Medical and Health Services or the
Chief Officer in-charge of Health administration in a State, by whatever designation he
is known, and includes any officer empowered by the Central Government or the State
Government, by notification in the Official Gazette, to exercise the powers and perform
the duties of the Food (Health) Authority under this Act with respect to such local area
as may be specified in the notification;

(vii) "local area" means any area, whether urban or rural, declared by the Central
Government or the State Government by notification in the Official Gazette, to be a local
area for the purposes of this Act; 4

(viii) "local authority" means in the case of : (1) a local area which is (a) a
municipality, the municipal board or municipal corporation; (b) a cantonment, the
cantonment authority ; (c) a notified area, the notified area committee; (2) any other
local area, such authority as may be prescribed by the Central Government or the State
Government under this Act;

(viiia) "Local (Health) Authority", in relation to a local area, means the officer appointed
by the Central Government or the State Government, by notification in the Official
Gazette, to be incharge of Health administration in such area with such designation as
may be specified therein:

(viiib) "manufacture" includes any process incidental or ancillary to the manufacture of

an article of food;

(ix) "misbranded" an article of food shall be deemed to be misbranded (a) if it is an

imitation of, or is a substitute for, or resembles in a manner likely to deceive, another
article of food under the name of which it is sold, and is not plainly and conspicuously
labelled so as to indicate its true character; (b) if it is falsely stated to be the product of
any place or country; (c) if it is sold by a name which belongs to another article of food;
(d) if it is so coloured, flavoured or coated, powdered or polished that the fact that the
article is damaged is concealed or if the article is made to appear better or of greater
value than it really is; (e) if false claims are made for it upon the label or otherwise; (f) if,
when sold in packages which have been sealed or prepared by or at the instance of the
manufacturer or producer and which bear his name and address, the contents of each
package are not conspicuously and correctly stated on the outside thereof within the
limits of variability prescribed under this Act; (g) if the package containing it, or the label
on the package bears any statement, design or device regarding the ingredients or the
substances contained therein, which is false or misleading in any material particular; or
if the package is otherwise deceptive with respect to its contents; 5 (h) if the package
containing it or the label on the package bears the name of a fictitious individual or
company as the manufacturer or producer of the article; (i) if it purports to be, or is
represented as being, for special dietary uses, unless its label bears such information
as may be prescribed concerning its vitamin, mineral, or other dietary properties in order
sufficiently to inform its purchaser as to its value for such uses; (j) if it contains any
artificial flavouring, artificial colouring or chemical preservative, without a declaratory
label stating that fact, or in contravention of the requirements of this Act or rules made
thereunder; (k) if it is not labelled in accordance with the requirements of this Act or
rules made thereunder;

(x) "package" means a box, bottle, casket, tin, barrel, case, receptacle, sack, bag,
wrapper or other thing in which an article of food is placed or packed;

(xi) "premises" include any shop, stall, or place where any article of food is sold or
manufactured or stored for sale;

(xii) "prescribed" means prescribed by rules made under this Act; (xiia) "primary food"
means any article of food, being a produce of agriculture or horticulture in its natural
form;

(xiii) "sale" with its grammatical variations and cognate expressions, means the sale of
any article of food, whether for cash or on credit or by way of exchange and whether by
wholesale or retail, for human consumption or use, or for analysis, and includes an
agreement for sale, an offer for sale, the exposing for sale or having in possession for
sale of any such article, and includes also an attempt to sell any such article;

(xiv) "sample" means a sample of any article of food taken under the provisions of this
Act or of any rules made thereunder;

(xv) the word "unwholesome" and "noxious" when used in relation to an article of food
mean respectively that the article is harmful to health or repugnant to human use.

COMMENTS (i) Even mere addition of salt to chili powder makes it injurious to health
as it was still considered adulterated within the meaning of sub-clause (m) of clause (ia)
of section 2 of the Act on the ground that the quantity and purity of the article falls below
the prescribed standard ;

Gauranga Aich v. State of Assam, 1990 (2) FAC 41. 6 (ii) Liquor (including country
liquor) is an article used as a drink and is meant for human consumption and for the
purposes of the Prevention of Food Adulteration Act, 1954 is included in the definition of
"food" under clause (v) of section 2; State of Himachal Pradesh v. Raja Ram, 1990 (2)
FAC 231.

2A. Rule of construction Any reference in this Act to a law which is not in force in the
State of Jammu and Kashmir shall, in relation to that State, be construed as a reference
to the corresponding law, if any, in force in that State.

CENTRAL COMMITTEE FOR FOOD STANDARDS AND CENTRAL FOOD

LABORATORY

3. The Central Committee for Food Standards (1) The Central Government shall, as
soon as may be after the commencement of this Act, constitute a Committee called the
Central Committee for Food Standards to advise the Central Government and the State
Governments on matters arising out of the administration of this Act and to carry out the
other functions assigned to it under this Act. (2) The Committee shall consist of the
following members, namely : (a) the Director-General, Health Services, ex-officio,
who shall be the Chairman; (b) the Director of the Central Food Laboratory or, in a case
where more than one Central Food Laboratory is established, the Directors of such
Laboratories, ex-officio ; (c) two experts nominated by the Central Government; (d) one
representative each of the Departments of Food and Agriculture in the Central Ministry
of Food and Agriculture and one representative each of the Central Ministries of
Commerce, Defence, Industry and Supply and Railways, nominated by the Central
Government; (e) one representative each nominated by the Government of each State;
(f) two representatives nominated by the Central Government to represent the Union
territories; (g) one representative each, nominated by the Central Government, to
represent the agricultural, commercial and industrial interests; 7 (gg) five
representatives nominated by the Central Government to represent the consumers,
interests, one of whom shall be from the hotel industry; (h) one representative of the
medical profession nominated by the Indian Council of Medical Research; (i) one
representative nominated by the Indian Standards Institution referred to in clause (e) of
section 2 of the Indian Standards Institution (Certification Marks) Act, 1952 (36 of 1952).

(3) The members of the Committee referred to in clauses (c), (d), (e), (f), (g), (gg), (h),
and (i) of sub-section (2) shall, unless their seats become vacant earlier by resignation,
death or otherwise, be entitled to hold office for three years and shall be eligible for
renomination.

(4) The functions of the Committee may be exercised notwithstanding any vacancy
therein.

(5) The Committee may appoint such and so many sub-committees as it deems fit and
may appoint to them persons who are not members of the Committee to exercise such
powers and perform such duties as may, subject to such conditions, if any, as the
Committee may impose, be delegated to them by the Committee.

(6) The Committee may, subject to the previous approval of the Central Government,
make bye laws for the purpose of regulating its own procedure and the transaction of its
business.

3A. Appointment of Secretary and other staff (1) The Central Government shall
appoint a Secretary, to the Committee who shall, under the control and direction of the
Committee, exercise such powers and perform such duties as may be prescribed or as
may be delegated to him by the Committee. (2) The Central Government shall provide
the Committee with such clerical and other staff as that Government considers
necessary.

4. Central Food Laboratory (1) The Central Government shall, by notification in the
Official Gazette, establish one or more Central Food Laboratory or Laboratories to carry
out the functions entrusted to the Central Food Laboratory by this Act or any rules made
under this Act: Provided that the Central Government may, by notification in the Official
Gazette, also specify any laboratory or institute as a Central Food Laboratory for the
purposes of this Act. (2) The Central Government may, after consultation with the
Committee, make rules prescribing 8 (a) the functions of a Central Food Laboratory
and the local area or areas within which such functions may be carried out; (b) the
procedure for the submission to the said Laboratory of samples of articles of food for
analysis or tests, the forms of the Laboratorys reports thereon and the fees payable in
respect of such reports; (c) such other matters as may be necessary or expedient to
enable the said laboratory to carry out its functions.
GENERAL PROVISIONS AS TO FOOD

5. Prohibition of import of certain articles of food No person shall import into India
(i) any adulterated food; (ii) any misbranded food; (iii) any article of food for the import of
which a licence is prescribed, except in accordance with the conditions of the licence ;
and (iv) any article of food in contravention of any other provision of this Act or of any
rule made thereunder.

6. Application of law relating to sea customs and powers of Customs Officers (1) The
law for the time being in force relating to sea customs and to goods, the import of which
is prohibited by section 18 of the Sea Customs Act, 1878 (8 of 1878), shall, subject to
the provisions of section 16 of this Act, apply in respect of articles of food, the import of
which is prohibited under section 5 of this Act, and officers of Customs and officers
empowered under that Act to perform the duties imposed thereby on a Customs
Collector and other officers of Customs shall have the same powers in respect of such
articles of food as they have for the time being in respect of such goods as aforesaid.
(2) Without prejudice to the provisions of sub-section (1) the Customs Collector, or any
officer of the Government authorised by the Central Government in this behalf, may
detain any imported package which he suspects to contain any article of food the import
of which is prohibited under section 5 of this Act and shall forthwith report such
detention to the Director of the Central Food Laboratory and, if required by him, forward
the package or send samples of any suspected article of food found therein to the said
Laboratory.

7. Prohibitions of manufacture, sale, etc., of certain articles of food No person shall

himself or by any person on his behalf manufacture for sale, or store, sell or distribute
(i) any adulterated food; (ii) any misbranded food; (iii) any article of food for the sale of
which a licence is prescribed, except in accordance with the conditions of the licence;
(iv) any article of food the sale of which is for the time being prohibited by the Food
(Health) Authority in the interest of public health; (v) any article of food in contravention
of any other provision of this Act or of any rule made thereunder; or (vi) any adulterant.
Explanation.For the purposes of this section, a person shall be deemed to store any
adulterated food or misbranded food or any article of food referred to in clause (iii) or
clause (iv) or clause (v) if he stores such food for the manufacture therefrom of any
article of food for sale.

ANALYSIS OF FOOD

8. Public Analysts The Central Government or the State Government may, by

notification in the Official Gazette, appoint such persons as it thinks fit, having the
prescribed qualifications to be public analysts for such local areas as may be assigned
to them by the Central Government or the State Government, as the case may be:
Provided that no person who has any financial interest in the manufacture, import or
sale of any article or food shall be appointed to be a public analyst under this section:
Provided further that different public analysts may be appointed for different articles of
food.

COMMENTS

Section 8 postulates that it is open to the State Government to appoint more than one
Public Analyst to any local area or areas and both would co-exist to have power and
jurisdiction to analyse an article or articles of food covered under the Act to find out
whether the same is adulterated; State of U.P. v. Hanif, AIR 1992 SC 1121.

9. Food Inspectors (1) The Central Government or the State Government may, by
notification in the Official Gazette, appoint such persons as it thinks fit, having the
prescribed qualifications to be food inspectors for such local areas as may be assigned
to them by the Central Government or the State Government, as the case may be:
Provided that no person who has any financial interest in the manufacture, import or
sale of any article of food shall be appointed to be a food inspector under this section.
(2) Every food inspector shall be deemed to be a public servant within the meaning of
section 21 of the Indian Penal Code (45 of 1860) and shall be officially subordinate to
such authority as the Government appointing him, may specify in this behalf.

10. Powers of food inspectors (1) A food inspector shall have power (a) to take
samples of any article of food from (i) any person selling such article; (ii) any person
who is in the course of conveying, delivering or preparing to deliver such article to a
purchaser or consignee; (iii) a consignee after delivery of any such article to him; and
(b) to send such sample for analysis to the public analyst for the local area within which
such sample has been taken; (c) with the previous approval of the Local (Health)
Authority having jurisdiction in the local area concerned, or with the previous approval of
the Food (Health) Authority, to prohibit the sale of any article of food in the interest of
public health. Explanation For the purposes of sub-clause (iii) of clause (a),
"consignee" does not include a person who purchases or receives any article of food for
his own consumption.

(2) Any food inspector may enter and inspect any place where any article of food is
manufactured, or stored for sale, or stored for the manufacture of any other article of
food for sale, or exposed or exhibited for sale or where any adulterant is manufactured
or kept, and take samples of such article of food or adulterant for analysis: Provided that
no sample of any article of food, being primary food, shall be taken under this sub-
section if it is not intended for sale as such food.
(3) Where any sample is taken under clause (a) of sub-section (1) or sub-section (2), its
cost calculated at the rate at which the article is usually sold to the public shall be paid
to the person from whom it is taken.

(4) If any article intended for food appears to any food inspector to be adulterated or
misbranded, he may seize and carry away or keep in the safe custody of the vendor
such article in order that it may be dealt with as hereinafter provided: and he shall, in
either case, take a sample of such article and submit the same for analysis to a public
analyst: Provided that where the food inspector keeps such article in the safe custody of
the vendor he may require the vendor to execute a bond for a sum of money equal to
the value of such article with one or more sureties as the food inspector deems fit and
the vendor shall execute the bond accordingly.

(4A) Where any article of food seized under sub-section (4) is of a perishable nature
and the Local (Health) Authority is satisfied that such article of food is so deteriorated
that it is unfit for human consumption, the said Authority may, after giving notice in
writing to the vendor, cause the same to be destroyed.

(5) The power conferred by this section includes power to break open any package in
which any article of food may be contained or to break open the door of any premises
where any article of food may be kept for sale: Provided that the power to break open
the package or door shall be exercised only after the owner or any other person in
charge of the package or, as the case may be, in occupation of the premises, if he is
present therein, refuses to open the package or door on being called upon to do so, and
in either case after recording the reasons for doing so: Provided further that the food
inspector shall, in exercising the powers of entry upon, and inspection of any place
under this section, follow, as far as may be, the provisions of the Code of Criminal
Procedure, 1973 (2 of 1974) relating to the search or inspection of a place by a police
officer executing a search warrant issued under that Code.

(6) Any adulterant found in the possession of a manufacturer or distributor of, or dealer
in, any article of food or in any of the premises occupied by him as such and for the
possession of which he is unable to account to the satisfaction of the food inspector,
and any books of account or other documents found in his possession or control and
which would be useful for, or relevant to, any investigation or proceeding under this Act,
may be seized by the food inspector and a sample of such adulterant submitted for
analysis to a public analyst: Provided that no such books of account or other documents
shall be seized by the food inspector except with the previous approval of the authority
to which he is officially subordinate.
(7) Where the food inspector takes any action under clause (a) of sub-section (1), sub-
section (2), sub-section (4) or sub-section (6), he shall call one or more persons to be
present at the time when such action is taken and take his or their signatures.

(7A) Where any books of account or other documents are seized under sub-section (6),
the food inspector shall within a period not exceeding thirty days from the date of
seizure, return the same to the person from whom they were seized after copies thereof
or extracts therefrom as certified by that person in such manner as may be prescribed
have been taken: Provided that where such person refuses to so certify, and a
prosecution has been instituted against him under this Act, such books of account or
other documents shall be returned to him only after copies thereof or extracts therefrom
as certified by the court have been taken.

(7B) When any adulterant is seized under sub-section (6), the burden of proving that
such adulterant is not meant for purposes of adulteration shall be on the person from
whose possession such adulterant was seized.

(8) Any food inspector may exercise the powers of a police officer under section 42 of
the Code of Criminal Procedure, 1973 (2 of 1974) for the purpose of ascertaining the
true name and residence of the person from whom a sample is taken or an article of
food is seized.

(9) Any food inspector exercising powers under this Act or under the rules made
thereunder who (a) vexatiously and without any reasonable grounds of suspicion
seizes any article of food or adulterant; or (b) commits any other act to the injury of any
person without having reason to believe that such act is necessary for the execution of
his duty; shall be guilty of an offence under this Act and shall be punishable for such
offence with fine which shall not be less than five hundred rupees but which may extend
to one thousand rupees.

COMMENTS

It is not the law that the evidence of a Food Inspector must necessarily need
corroboration from independent witnesses. The evidence of the Food Inspector is not
inherently suspected, nor should it be rejected on that ground. He discharges the public
function in purchasing an article of food for analysis and if the article of food so
purchased in the manner prescribed under the Act is found adulterated, he is required
to take action as per the law. He discharges the public duty. His evidence is to be tested
on its own merits and if found acceptable, the court would be entitled to accept and rely
on to prove prosecution case; State of U.P. v. Hanif, AIR 1992 SC 1121.
Where sample was not sent by Food Inspector or by the complainant without following
the procedure as laid down in the Act, cognizance is bad and is in contravention of the
law; Yamuna Sah v. State of Bihar, 1990 (2) FAC 16.

The Food Inspector shall call one or more persons present at the time of taking of a
sample; State of Orissa v. K. Appa Rao Subudhi, 1990 (2) FAC 189; State of Assam v.
Sumermal Jain, 1990 (2) FAC 223.

The Food Inspector is a public servant. There is no cogent reason to disbelieve his
evidence; Ram Gopal Aggarwal v. S.M. Mitra, 1989 (2) FAC 339.

Where outsiders who were present at the spot refused to be cited as witness and went
away, then the Food Inspector did not fault in calling independent witnesses; Laxmidhar
Saha v. State of Orissa, 1989 (1) FAC 364.

11. Procedure to be followed by food inspectors

(1) When a food inspector takes a sample of food for analysis, he shall (a) give notice
in writing then and there of his intention to have it so analysed to the person from whom
he has taken the sample and to the person, if any, whose name, address and other
particulars have been disclosed under section 14A; (b) except in special cases provided
by rules under this Act, divide the sample then and there into threes parts and mark and
seal or fasten up each part in such a manner as its nature permits and take the
signature or thumb impression of the person from whom the sample has been taken in
such place and in such manner as may be prescribed: Provided that where such person
refuses to sign or put his thumb impression the food inspector shall call upon one or
more witnesses and take his or their signatures or thumb impressions, as the case may
be, in lieu of the signature of thumb impression of such person; (c) (i) send one of the
parts for analysis to the public analyst under intimation to the Local (Health) Authority;
and (ii) send the remaining two parts to the Local (Health) Authority for the purposes of
subsection (2) of this section and sub-sections (2A) and (2E) of section 13.

(2) Where the part of the sample sent to the public analyst under sub-clause (i) of
clause (c) of sub-section (1) is lost or damaged, the Local (Health) Authority shall, on a
requisition made to it by the public analyst or the food inspector despatch one of the
parts of the sample sent to it under sub-clause (ii) of the said clause (c) to the public
analyst for analysis.

(3) When a sample of any article of food or adulterant is taken under sub-section (1) or
subsection (2) of section 10, the food inspector shall, by the immediately succeeding
working day, send a sample of the article of food or adulterant or both, as the case may
be, in accordance with the rules prescribed for sampling to the public analyst for the
local area concerned.
(4) An article of food seized under sub-section (4) of section 10, unless destroyed under
subsection (4A) of that section, and any adulterant seized under sub-section (6) of that
section shall be produced before a magistrate as soon as possible and in any case not
later than seven days after the receipt of the report of the public analyst: 14 Provided
that if an application is made to the magistrate in this behalf by the person from whom
any article of food has been seized, the magistrate shall by order in writing direct the
food inspector to produce such article before him within such time as may be specified
in the order.

(5) If it appears to the magistrate on taking such evidence as he may deem necessary
(a) that the article of food produced before him under sub-section (4) is adulterated or
misbranded, he may order it (i) to be forfeited to the Central Government, the State
Government or the local authority, as the case may be; or (ii) to be destroyed at the cost
of the owner or the person from whom it was seized so as to prevent its being used as
human food; or (iii) to be so disposed of as to prevent its being again exposed for sale
or used for food under its deceptive name; or (iv) to be returned to the owner, on his
executing a bond with or without sureties, for being sold under its appropriate name or,
where the magistrate is satisfied that the article of food is capable of being made to
conform to prescribed standards for human consumption after reprocessing, for being
sold after reprocessing under the supervision of such officer as may be specified in the
order; (b) that the adulterant seized under sub-section (6) of section 10 and produced
before him is apparently of a kind which may be employed for purposes of adulteration
and for the possession of which the manufacturer, distributor or dealer, as the case may
be, is unable to account satisfactorily, he may order it to be forfeited to the Central
Government, the State Government or the local authority, as the case may be.

(6) If it appears to the magistrate that any such (a) article of food is not adulterated; or
(b) adulterant which is purported to be an adulterant is not an adulterant, the person
from whose possession the article of food or adulterant was taken shall be entitled to
have it restored to him and it shall be in the discretion of the magistrate to award such
person from such fund as the State Government may direct in this behalf, such
compensation not exceeding the actual loss which he has sustained as the magistrate
may think proper.

COMMENTS

The sub-section (3) of section 11 is directory and not mandatory in nature; Binda
Prasad v. State, 1995 (1) FAC 43.

The requirement of section 11 of the Act is that the Food Inspector shall take the
sample and divide it there and then in three parts and mark and seal each part in such a
manner as its natural way permits and take signature or thumb impression of the person
from whom the sample has been taken; State of Rajasthan v. Naresh Chand, 1989 (1)
FAC 338.

The responsibility of the Food Inspector is only to send the sample not later than the
immediately succeeding working day to the Public Analyst. The method in which he has
to send it is not specified in section 11(3) of the Act; Food Inspector v. Noor
Mohammed, 1989 (1)FAC 371.

12. Purchaser may have food analysed Nothing contained in this Act shall be held to
prevent a purchaser of any article of food other than a food inspector or a recognised
consumer association, whether the purchaser is a member of that association or not
from having such article analysed by the public analyst on payment of such fees as may
be prescribed and from receiving from the public analyst a report of his analysis:
Provided that such purchaser or recognised consumer association shall inform the
vendor at the time of purchase of his or its intention to have such article so analysed:
Provided further that the provisions of sub-section (1), sub-section (2) and sub-section
(3) of section 11 shall, as far as may be, apply to a purchaser of article of food or
recognised consumer association, who or which intends to have such articles so
analysed, as they apply to a food inspector who takes a sample of food for analysis:
Provided also that if the report of the public analyst shows that the article of food is
adulterated, the purchaser or recognised consumer association shall be entitled to get
refund of the fees paid by him or it under this section. Explanation For the purpose of
this section and section 20, "recognised consumer association" means a voluntary
consumer association registered under the Companies Act, 1956 (1 of 1956), or under
any other law for the time being in force.

13. Report of public analyst (1) The public analyst shall deliver, in such form as may
be prescribed, a report to the Local (Health) Authority of the result of the analysis of any
article of food submitted to him for analysis. (2) On receipt of the report of the result of
the analysis under sub-section (1) to the effect that the article of food is adulterated, the
Local (Health) Authority shall, after the institution of prosecution against the persons
from whom the sample of the article of food was taken and the person, if any, whose
name, address and other particulars have been disclosed under section 14A, forward, in
such manner as may be prescribed, a copy of the report of the result of the analysis to
such person or persons, as the case may be, informing such person or persons that if it
is so desired, either or both of them may make an application to the court within a
period of ten days from the date of receipt of the copy of the report to get the sample of
the article of food kept by the Local (Health) Authority analysed by the Central Food
Laboratory. (2A) When an application is made to the court under sub-section (2), the
court shall require the Local (Health) Authority to forward the part or parts of the sample
kept by the said Authority and upon such requisition being made, the said Authority
shall forward the part or parts of the sample to the court within a period of five days from
the date of receipt of such requisition. (2B) On receipt of the part or parts of the sample
from the Local (Health) Authority under subsection (2A), the court shall first ascertain
that the mark and seal or fastening as provided in clause (b) of sub-section (1) of
section 11 are intact and the signature or thumb impression, as the case may be, is not
tampered with, and despatch the part or, as the case may be, one of the parts of the
sample under its own seal to the Director of the Central Food Laboratory who shall
thereupon send a certificate to the court in the prescribed form within one month from
the date of receipt of the part of the sample specifying the result of the analysis. (2C)
Where two parts of the sample have been sent to the court and only one part of the
sample has been sent by the court to the Director of the Central Food Laboratory under
sub-section (2B), the court shall, as soon as practicable, return the remaining part to the
Local (Health) Authority and that Authority shall destroy that part after the certificate
from the Director of the Central Food Laboratory has been received by the court:
Provided that where the part of the sample sent by the court to the Director of the
Central Food Laboratory is lost or damaged, the court shall require the Local (Health)
Authority to forward the part of the sample, if any, retained by it to the court and on
receipt thereof, the court shall proceed in the manner provided in sub-section (2B). (2D)
Until the receipt of the certificate of the result of the analysis from the Director of the
Central Food Laboratory, the court shall not continue with the proceedings pending
before it in relation to the prosecution. (2E) If, after considering the report, if any, of the
food inspector or otherwise, the Local (Health) Authority is of the opinion that the report
delivered by the public analyst under sub-section (1) is erroneous, the said Authority
shall forward one of the parts of the sample kept by it to any other public analyst for
analysis and if the report of the result of the analysis of that part of the sample by that
other public analyst is to the effect that the article of food is adulterated, the provisions
of sub-sections (2) to (2D) shall, so far as may be, apply. (3) The certificate issued by
the Director of the Central Food Laboratory under sub-section (2B) shall supersede the
report given by the public analyst under sub-section (1). (4) Where a certificate obtained
from the Director of the Central Food Laboratory under subsection (2B) is produced in
any proceeding under this Act, or under sections 272 to 276 of the Indian Penal Code
(45 of 1860), it shall not be necessary in such proceeding to produce any part of the
sample of food taken for analysis. 17 (5) Any document purporting to be a report signed
by a public analyst, unless it has been superseded under sub-section (3), or any
document purporting to be a certificate signed by the Director of the Central Food
Laboratory, may be used as evidence of the facts stated therein in any proceeding
under this Act or under sections 272 to 276 of the Indian Penal Code (45 of 1860):
Provided that any document purporting to be a certificate signed by the Director of the
Central Food Laboratory [not being a certificate with respect to the analysis of the part
of the sample of any article of food referred to in the proviso to sub-section (1A) of
section 16 shall be final and conclusive evidence of the facts stated therein. Explanation
 In this section, and in clause (f) of sub-section (l) of section 16, "Director of the
Central Food Laboratory" shall include the officer for the time being in charge of any
Food Laboratory (by whatever designation he is known) recognised by the Central
Government for the purposes of this section.

COMMENTS

The provision of sub-section (2) of section 13 of the Act is mandatory in nature; Bijaya
Kumar Ram v. State, 1989 (1) FAC 394. (ii) Sub-section (2) of section 13 of the Act
confers valuable right on the accused under which provision the accused can make an
application to the court within a period of 10 days from the receipt of copy of the report
of Public Analyst to get the samples of food analysed in the Central Food Laboratory
and in case the sample is found by the said Central Food Laboratory unfit for analysis
due to decomposition by passage of time or for any other reason attributable to the
lapses on the side of prosecution, that valuable right would stand denied. This would
constitute prejudice to the accused entitling him to acquittal but mere delay as such will
not per se be fatal to the prosecution case even in cases where the sample continues to
remain fit for analysis inspite of the delay because the accused is in no way prejudiced
on the merits of the case in respect of such delay; T.V. Usman v. Food Inspector,
Tellicherry Municipality, AIR 1994 SC 1818.

(iii) An accused is entitled under sub-section (2) of section 13 of the Act to prove his
innocence by getting his sample analysed from Central Food Laboratory which
supersedes the report of the public analyst for ensuring a fair trial; Srinivas Pradhan v.
State of Orissa, 1990 (2) FAC 101.

MISCELLANEOUS

14. Manufacturers, distributors and dealers to give warranty No manufacturer or

distributor of, or dealer in any article of food shall sell such article to any vendor unless
he also gives a warranty in writing in the prescribed form about the nature and quality of
such article to the vendor: 18 Provided that a bill, cash memorandum or invoice in
respect of the sale of any article of food given by a manufacturer or distributor of, or
dealer in, such article to the vendor thereof shall be deemed to be a warranty given by
such manufacturer, distributor or dealer under this section. Explanation In this
section, in sub-section (2) of section 19 and in section 20A, the expression "distributor"
shall include a commission agent.

14A. Vendor to disclose the name, etc., of the person from whom the article of food was
purchased Every vendor of an article of food shall, if so required, disclose to the food
inspector the name, address and other particulars of the person from whom he
purchased the article of food.
15. Notification of food poisoning The Central Government or the State Government
may, by notification in the Official Gazette, require medical practitioners carrying on their
profession in any local area specified in the notification to report all occurrences of food
poisoning coming within their cognizance to such officer as may be specified in the
notification.

16. Penalties (1) Subject to the provisions of sub-section (1A) if any person (a)
whether by himself or by any other person on his behalf, imports into India or
manufactures for sales or stores, sells or distributes any article of food (i) which is
adulterated within the meaning of sub-clause (m) of clause (ia) of section 2 or
misbranded within the meaning of clause (ix) of that section or the sale of which is
prohibited under any provision of this Act or any rule made thereunder or by an order of
the Food (Health) Authority; (ii) other than an article of food referred to in sub-clause (i),
in contravention of any of the provisions of this Act or of any rule made thereunder; or
(b) whether by himself or by any other person on his behalf, imports into India or
manufactures for sales or stores, sells or distributes any adulterant which is not injurious
to health; or (c) prevents a food inspector from taking a sample as authorised by this
Act; or (d) prevents a food inspector from exercising any other power conferred on him
by or under this Act; or 19 (e) being a manufacturer of an article of food, has in his
possession, or in any of the premises occupied by him, any adulterant which is not
injurious to health; or (f) uses any report or certificate of a test or analysis made by the
Director of the Central Food Laboratory or by a public analyst or any extract thereof for
the purpose of advertising any article of food; or (g) whether by himself or by any other
person on his behalf, gives to the vendor a false warranty in writing in respect of any
article of food sold by him, he shall, in addition to the penalty to which he may be liable
under the provisions of section 6, be punishable with imprisonment for a term which
shall not be less than six months but which may extend to three years, and with fine
which shall not be less than one thousand rupees: Provided that (i) if the offence is
under sub-clause (i) of clause (a) and is with respect to an article of food, being primary
food, which is adulterated due to human agency or is with respect to an article of food
which is misbranded within the meaning of sub-clause (k) of clause (ix) of section 2; or
(ii) if the offence is under sub-clause (ii) of clause (a), but not being an offence with
respect to the contravention of any rule made under clause (a) or clause (g) of
subsection (1A) of section 23 or under clause (b) of sub-section (2) of section 24. the
court may, for any adequate and special reasons to be mentioned in the judgment,
impose a sentence of imprisonment for a term which shall not be less than three months
but which may extend to two years, and with fine which shall not be less than five
hundred rupees: Provided further that if the offence is under sub-clause (ii) of clause (a)
and is with respect to the contravention of any rule made under clause (a) or clause (g)
of sub-section (1A) of section 23 or under clause (b) of sub-section (2) of section 24, the
court may, for any adequate and special reasons to be mentioned in the judgment,
impose a sentence of imprisonment for a term which may extend to three months and
with fine which may extend to five hundred rupees. (1A) If any person whether by
himself or by any other person on his behalf, imports into India or manufactures for sale,
or stores, sells or distributes, (i) any article of food which is adulterated within the
meaning of any of the subclauses (e) to (l) (both inclusive) of clause (ia) of section 2; or
(ii) any adulterant which is injurious to health, he shall, in addition to the penalty to
which he may be liable under the provisions of section 6, be punishable with
imprisonment for a term which shall not be less than one year but which may extend to
six years and with fine which shall not be less than two thousand rupees: Provided that
if such article of food or adulterant when consumed by any person is likely to cause his
death or is likely to cause such harm on his body as would amount to grievous hurt
within the meaning of section 320 of the Indian Penal Code (45 of 1860), he shall be
punishable with imprisonment for a term which shall not be less than three years but
which may extend to term of life and with fine which shall not be less than five thousand
rupees. (1AA) If any person in whose safe custody any article of food has been kept
under sub-section (4) of section 10, tampers or in any other manner interferes with such
article, he shall be punishable with imprisonment for a term which shall not be less than
six months but which may extend to two years and with fine which shall not be less than
one thousand rupees. (1B) If any person in whose safe custody any article of food has
been kept under sub-section (4) of section 10, sells or distributes such article which is
found by the magistrate before whom it is produced to be adulterated within the
meaning of sub-clause (h) of clause (ia) of section 2 and which, when consumed by any
person, is likely to cause his death or is likely to cause such harm on his body as would
amount to grievous hurt within the meaning of section 320 of the Indian Penal Code (45
of 1860), then, notwithstanding anything contained in sub-section (1AA), he shall be
punishable with imprisonment for a term which shall not be less than three years but
which may extend to term of life and with fine which shall not be less than five thousand
rupees. (1C) If any person contravenes the provisions of section 14 or section 14A, he
shall be punishable with imprisonment for a term which may extend to six months and
with fine which shall not be less than five hundred rupees. (1D) If any person convicted
of an offence under this Act commits a like offence afterwards, then, without prejudice to
the provisions of sub-section (2), the court, before which the second or subsequent
conviction takes place, may order the cancellation of the licence, if any, granted to him
under this Act and thereupon such licence shall, notwithstanding anything contained in
this Act, or in the rules made thereunder, stand cancelled. (2) If any person convicted of
an offence under this Act commits a like offence afterwards it shall be lawful for the
court before which the second or subsequent conviction takes place to cause the
offenders name and place of residence, the offence and the penalty imposed to be
published at the offenders expense in such newspapers or in such other manner as the
court may direct. The expenses of such publication shall be deemed to be part of the
cost attending the conviction and shall be recoverable in the same manner as a fine.
COMMENTS

(i) The sample of milk procured from the accused (milk vendor) was declared to be
adulterated on the sole ground that there was some deficiency in milk solids, non-fats.
Since the adulteration is of a minor nature, the conviction of accused is reduced from 3
months imprisonment to fine; Khem Chand v. State of Himachal Pradesh, AIR 1994 SC
226.

(ii) Where til oil was not commonly used in the area for human consumption, accused
could not be found guilty and his conviction was to be set aside; Laxmidhar Sahu v.
State of Orissa, 1989 (1) FAC 364 ; 1989 FAJ 463.

16A. Power of court to try cases summarily Notwithstanding anything contained in

the Code of Criminal Procedure, 1973 (2 of 1974), all offences under sub-section (1) of
section 16 shall be tried in a summary way by a Judicial Magistrate of the first class
specially empowered in this behalf by the State Government or by a Metropolitan
Magistrate and the provisions of sections 262 to 265 (both inclusive) of the said Code
shall, as far as may be, apply to such trial: Provided that in the case of any conviction in
a summary trial under this section, it shall be lawful for the magistrate to pass a
sentence of imprisonment for a term not exceeding one year: Provided further that when
at the commencement of, or in the course of, a summary trial under this section it
appears to the magistrate that the nature of the case is such that a sentence of
imprisonment for a term exceeding one year may have to be passed or that it is, for any
other reason, undesirable to try the case summarily, the Magistrate shall after hearing
the parties, record an order to that effect and thereafter recall any witness who may
have been examined and proceed to hear or rehear the case in the manner provided by
the said Code.

COMMENTS This section is an exception to section 262(2) of the Code of Criminal

Procedure, 1973 (2 of 1974). The word shall may be understood as may when a case
is tried in a summary way. The procedure to be followed is of a summons case;
Chandak v. Food Inspector, 1990 (1) FAC 76.

17. Offences by companies (1) Where an offence under this Act has been committed
by a company (a) (i) the person, if any, who has been nominated under sub-section
(2) to be in charge of, and responsible to, the company for the conduct of the business
of the company (hereafter in this section referred to as the person responsible), or (ii)
where no person has been so nominated, every person who at the time the offence was
committed was in charge of, and was responsible to, the company for the conduct of the
business of the company; and (b) the company, shall be deemed to be guilty of the
offence and shall be liable to be proceeded against and punished accordingly: Provided
that nothing contained in this sub-section shall render any such person liable to any
punishment provided in this Act if he proves that the offence was committed without his
knowledge and that he exercised all due diligence to prevent the commission of such
offence. (2) Any company may, by order in writing, authorise any of its directors or
managers (such manager being employed mainly in a managerial or supervisory
capacity) to exercise all such powers and take all such steps as may be necessary or
expedient to prevent the commission by the company of any offence under this Act and
may give notice to the Local (Health) Authority, in such form and in such manner as
may be prescribed, that it has nominated such director or manager as the person
responsible, along with the written consent of such director or manager for being so
nominated. Explanation Where a company has different establishments or branches
or different units in any establishment or branch, different persons may be nominated
under this sub-section in relation to different establishments or branches or units and
the person nominated in relation to any establishment, branch or unit shall be deemed
to be the person responsible in respect of such establishment, branch or unit. (3) The
person nominated under sub-section (2) shall, until (i) further notice cancelling such
nomination is received from the company by the Local (Health) Authority; or (ii) he
ceases to be a director or, as the case may be, manager of the company; or (iii) he
makes a request in writing to the Local (Health) Authority, under intimation to the
company, to cancel the nomination [which request shall be complied with by the Local
(Health) Authority, whichever is the earliest, continue to be the person responsible:
Provided that where such person ceases to be a director or, as the case may be,
manager of the company, he shall intimate the fact of such cesser to the Local (Health)
Authority: Provided further that where such person makes a request under clause (iii),
the Local (Health) Authority shall not cancel such nomination with effect from a date
earlier than the date on which the request is made. (4) Notwithstanding anything
contained in the foregoing sub-sections, where an offence under this Act has been
committed by a company and it is proved that the offence has been committed with the
consent or connivance of, or is attributable to, any neglect on the part of, any director,
manager, secretary or other officer of the company [not being a person nominated
under subsection (2) such director, manager, secretary or other officer shall also be
deemed to be guilty of that offence and shall be liable to be proceeded against and
punished accordingly. Explanation For the purposes of this section (a) "Company"
means any body corporate and includes a firm or other association of individuals; (b)
"director", in relation to a firm, means a partner in the firm; and (c) "manager", in relation
to a company engaged in hotel industry, includes the person in charge of the catering
department of any hotel managed or run by it.

COMMENTS
It is clear from the scheme of section 17 of the Act that where a company has
committed an offence under the Act, the person nominated under sub-section (2) to be
incharge of, and responsible to, the company for the conduct of its business shall be
proceeded against unless it is shown that the offence was committed with the
consent/connivance/negligence of any other Director, Manager, Secretary or Officer of
the company in which case the said person can also be proceeded against and
punished for commission of offence; R.Banerjee v. H.D. Dubey, AIR 1992 SC 1168.

The person incharge of the company must be prosecuted alongwith the company under
this section; State of Assam v. Paban Kumar Aggarwal, 1990 (1) FAC 115.

In the absence of specific pleadings in the complaint regarding the person incharge of
and responsible to the conduct of the business, the prosecution launched against him is
not maintainable and the same is to be quashed; Carborandum Universal Madras v.
Food Inspector Thiruvettiyur Municipality, 1989 (1) FAC 367.

18. Forfeiture of property Where any person has been convicted under this Act for
the contravention of any of the provisions of this Act or of any rule thereunder, the
article of food in respect of which the contravention has been committed may be
forfeited to the Government: Provided that where the court is satisfied that the article of
food is capable of being made to conform to prescribed standards for human
consumption after reprocessing, the court may order the article of food to be returned to
the owner, on his executing a bond with or without sureties, for being sold, subject to
the other provisions of this Act, after reprocessing under the supervision of such officer
as may be specified therein.

19. Defences which may or may not be allowed in prosecutions under this Act (1) It
shall be no defence in a prosecution for an offence pertaining to the sale of any
adulterated or misbranded article of food to allege merely that the vendor was ignorant
of the nature, substance or quality of the food sold by him or that the purchaser having
purchased any article for analysis was not prejudiced by the sale. (2) A vendor shall not
be deemed to have committed an offence pertaining to the sale of any adulterated or
misbranded article of food if he proves (a) that he purchased the article of food (i) in
a case where a licence is prescribed for the sale thereof, from a duly licensed
manufacturer, distributor or dealer, (ii) in any other case, from any manufacturer,
distributor or dealer, with a written warranty in the prescribed form; and (b) that the
article of food while in his possession was properly stored and that he sold it in the
same state as he purchased it. (3) Any person by whom a warranty as is referred to in
section 14 is alleged to have been given shall be entitled to appear at the hearing and
give evidence.

COMMENTS
 A person is entitled to benefit under sub-section (2) of section 19 if the fact of the case
suggests that he (accused person) has duly discharged the burden to the extent
necessary under the above mentioned provision; P. Unnikrishnan v. Food Inspector,
Palghat Municipality, AIR 1995 SC 1983.

20. Cognizance and trial of offences (1) No prosecution for an offence under this Act,
not being an offence under section 14 or section 14A shall be instituted except by, or
with the written consent of, the Central Government or the State Government or a
person authorised in this behalf, by general or special order, by the Central Government
or the State Government: Provided that a prosecution for an offence under this Act may
be instituted by a purchaser or recognised consumer association referred to in section
12, if he or it produces in court a copy of the report of the public analyst alongwith the
complaint. (2) No court inferior to that of a Metropolitan Magistrate or a Judicial
Magistrate of the first class shall try any offence under this Act. (3) Notwithstanding
anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence
punishable under sub-section (1AA) of section 16 shall be cognizable and non-bailable.

COMMENTS

(i) The language of sub-section (1) of section 20 of the Act clearly shows that it inhibits
institution of prosecution for an offence under the Act except on fulfilment of one or the
other of the two conditions. Either the prosecution must be instituted by the Central
Government or the State Government or it must be instituted with the written consent of
any of the four specified categories of authorities or persons. If either of these two
conditions is satisfied, there would be sufficient authority for the institution of such a
prosecution for an offence under the Act; A.K. Roy v. State of Punjab, AIR 1986 SC
2160. 25

(ii) The Chief Medical Officer, Chandigarh undisputedly was a person authorised to
institute complaint as per the notification issued by the Administration under section
20(1) of the Act therefore, he could give his consent as well for launching of
prosecution. In doing so he was neither delegating his power nor acting contrary to
section 20. He was acting within the scope of authority as a person authorised to
institute complaint under section 20(1) of the Act has been placed at par with other
authorities designated in the sub-section for purposes of granting consent; Food
Inspector, Health Deptt., Chandigarh v. M/s Krishna Dhaba, AIR 1994 SC 664.

No prosecution for an offence under the Prevention of Food Adulteration Act, 1954 shall
be instituted except by written consent of Central Government or State Government.
Where cognizance was taken on the F.I.R. lodged by the police but there is nothing on
record that police was authorised by the Central Government or State Government to
institute the prosecution. Then court has no power to hear the complaint thereby
rendering the consequent proceedings liable to be quashed; Yamuna Sah v. State of
Bihar, 1990(2) FAC 16.

20A. Power of court to implead manufacturer, etc. Where at any time during the trial
of any offence under this Act alleged to have been committed by any person, not being
the manufacturer, distributor or dealer of any article of food, the court is satisfied, on the
evidence adduced before it, that such manufacturer, distributor or dealer is also
concerned with that offence, then, the court may, notwithstanding anything contained in
subsection (3) of section 319 of the Code of Criminal Procedure, 1973 (2 of 1974) or in
section 20 proceed against him as though a prosecution had been instituted against him
under section 20.

COMMENTS

Under section 20A powers cannot be exercised before the commencement of trial
because it is only on the basis of evidence produced that the Magistrate can act under
this section; Radha Krishna Nair v. Food Inspector, 1989(1) FAC 234.

x(ii) The power to implead the manufacturer, distributor or dealer under the section 20A
of the Act can be exercised during the trial of an offence under the Act; M/s. Thakur Das
Babu Ram v. State of Himachal Pradesh, 1989(1) FAC 343. 20 AA. Application of the
Probation of Offenders Act, 1958 and section 360 of the Code of Criminal Procedure,
1973 Nothing contained in the Probation of Offenders Act, 1958 (20 of 1958), or
section 360 of the Code of Criminal Procedure, 1973 (2 of 1974), shall apply to a person
convicted of an offence under this Act unless that person is under eighteen years of
age.

21. Magistrates power to impose enhanced penalties Notwithstanding anything

contained in section 29 of the Code of Criminal Procedure, 1973 (2 of 1974), it shall be
lawful for any Metropolitan Magistrate or any Judicial Magistrate of the first class to pass
any sentence authorised by this Act, except a sentence of imprisonment for life or for a
term exceeding six years, in excess of his powers under the said section.

22. Protection of action taken in good faith No suit, prosecution or other legal
proceedings shall lie against any person for anything which is in good faith done or
intended to be done under this Act.

22A. Power of Central Government to give directions The Central Government may
give such directions as it may deem necessary to a State Government regarding the
carrying into execution of all or any of the provisions of this Act and the State
Government shall comply with such directions.
23. Power of the Central Government to make rules (1) The Central Government
may, after consultation with the Committee and after previous publication by notification
in the Official Gazette, make rules to carry out the provisions of this Act: Provided that
consultation with the Committee may be dispensed with if the Central Government is of
the opinion that circumstances have arisen which render it necessary to make rules
without such consultation, but, in such a case, the Committee shall be consulted within
six months of the making of the rules and the Central Government shall take into
consideration any suggestions which the Committee may make in relation to the
amendment of the said rules. (1A) In particular and without prejudice to the generality of
the foregoing power, such rules may provide for all or any of the following matters,
namely : (a) specifying the articles of food or classes of food for the import of which a
licence is required and prescribing the form and conditions of such licence, the authority
empowered to issue the same the fees payable therefor, the deposit of any sum as
security for the performance of the conditions of the licence and the circumstances
under which such licence or security may be cancelled or forfeited; (b) defining the
standards of quality for, and fixing the limits of variability permissible in respect of, any
article of food; (c) laying down special provisions for imposing rigorous control over the
production, distribution and sale of any article or class of articles of food which the
Central Government may, by notification in the Official Gazette, specify in this behalf
including registration of the premises where they are manufactured, maintenance of the
premises in a sanitary condition and maintenance of the healthy state of human beings
associated with the production, distribution and sale of such article or class of articles;
(d) restricting the packing and labelling of any article of food and the design of any such
package or label with a view to preventing the public or the purchaser being deceived or
misled as to the character, quality or quantity of the article or to preventing adulteration;
(e) defining the qualifications, powers and duties of food inspectors and public analyst;
(ee) defining the laboratories where samples of articles of food or adulterants may be
analysed by public analysts under this Act; (f) prohibiting the sale of defining the
conditions of sale of any substance which may be injurious to health when used as food
or restricting in any manner its use as an ingredient in the manufacture of any article of
food or regulating by the issue of licences the manufacture or sale of any article of food;
(g) defining the conditions of sale or conditions for licence of sale of any article of food
in the interest of public health; (h) specifying the manner in which containers for
samples of food purchased for analysis shall be sealed up or fastened up; (hh) defining
the methods of analysis; (i) specifying a list of permissible preservatives, other than
common salt and sugar, which alone shall be used in preserved fruits, vegetables or
their products or any other article of food as well as the maximum amounts of each
preservative; (j) specifying the colouring matter and the maximum quantities thereof
which may be used in any article of food; (k) providing for the exemption from this Act or
of any requirements contained therein and subject to such conditions, if any, as may be
specified, of any article or class of articles of food; (l) prohibiting or regulating the
manufacture, transport or sale of any article known to be used as an adulterant of food;
(m) prohibiting or regulating (i) the addition of any water, or other diluent or adulterant
to any article of food; (ii) the abstraction of any ingredient from any article of food; (iii)
the sale of any article of food to which such addition or from which such abstraction has
been made or which has been otherwise artificially treated; (iv) the mixing of two or
more articles of food which are similar in nature or appearance; (n) providing for the
destruction of such articles of food as are not in accordance with the provisions of this
Act or of the rules made thereunder.

24. Power of the State Government to make rules (1) The State Government may,
after consultation with the Committee and subject to the condition of previous
publication, make rules for the purpose of giving effect to the provisions of this Act in
matters not falling within the purview of section 23. (2) In particular, and without
prejudice to the generality of the foregoing power, such rules may (a) define the
powers and duties of the Food (Health) Authority, local authority and Local (Health)
Authority under this Act ; (b) prescribe the forms of licences for the manufacture for
sale, for the storage, for the sale and for the distribution of articles of food or any
specified article of food or class of articles of food, the form of application for such
licences, the conditions subject to which such licences may be issued, the authority
empowered to issue the same, the fees payable therefor, the deposit of any sum as
security for the performance of the conditions of the licences and the circumstances
under which such licences or security may be suspended, cancelled or forfeited; (c)
direct a fee to be paid for analysing any article of food or for any matter for which a fee
may be prescribed under this Act; (d) direct that the whole or any part of the fines
imposed under this Act shall be paid to a local authority on realisation; (e) provide for
the delegation of the powers and functions conferred by this Act on the State
Government or the Food (Health) Authority to subordinate authorities or to local
authorities. (3) All rules made by the State Governments under this Act, shall, as soon
as possible after they are made, be laid before the respective State Legislatures.

25. Repeal and Saving (1) If, immediately before the commencement of this Act,
there is in force in any State to which this Act extends any law corresponding to this Act,
that corresponding law shall upon such commencement stand repealed. (2)
Notwithstanding the repeal by this Act of any corresponding law, all rules, regulations
and bye-laws relating to the prevention of adulteration of food, made under such
corresponding law and in force immediately before the commencement of this Act shall
except where and so far as they are inconsistent with or repugnant to the provisions of
this Act, continue in force until altered, amended or repealed by rules made under this
Act.
 b.Control of Spurious Drugs:

THE DRUGS AND COSMETICS ACT, 1940

An Act to regulate the import, manufacture, distribution and sale of drugs and
cosmetics; WHEREAS it is expedient to regulate the import, manufacture, distribution
and sale] of drugs and cosmetics; AND WHEREAS the Legislature of all the Provinces
have passed resolutions in terms of section 103 of the Government of India Act, 1935
(26 Geo. 5, c.2), in relation to such of the above-mentioned matters and matters
ancillary thereto as are enumerated in List II of the Seventh Schedule to the said Act; It
is hereby enacted as follows:-

3.Definitions.In this Act, unless there is anything repugnant in the subject or context,

(a) Ayurvedic, Siddha or Unani drug includes all medicines intended for internal or
external use for or in the diagnosis, treatment, mitigation or prevention of 8 [disease or
disorder in human beings or animals, and manufactured] exclusively in accordance with
the formulae described in, the authoritative books of Ayurvedic, Siddha and Unani Tibb
systems of medicine], specified in the First Schedule;

(aa) the Board means (i) in relation to Ayurvedic, Siddha or Unani] drug, the
Ayurvedic, Siddha and Unani Drugs Technical Advisory Board constituted under section
33C; and (ii) in relation to any other drug or cosmetic, the Drugs Technical Advisory
Board constituted under section 5;

[(aaa)] cosmetic means any article intended to be rubbed, poured, sprinkled or

sprayed on, or introduced into, or otherwise applied to, the human body or any part
thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance,
and includes any article intended for use as a component of cosmetic.

(b) drug includes 5 [(i) all medicines for internal or external use of human beings or
animals and all substances intended to be used for or in the diagnosis, treatment,
mitigation or prevention of any disease or disorder in human beings or animals,
including preparations applied on human body for the purpose of repelling insects like
mosquitoes;] (ii) such substances (other than food) intended to affect the structure or
any function of the human body or intended to be used for the destruction of 6 [vermin]
or insects which cause disease in human beings or animals, as may be specified from
time to time by the Central Government by notification in the Official Gazette; (iii) all
substances intended for use as components of a drug including empty gelatin capsules;
and (iv) such devices intended for internal or external use in the diagnosis, treatment,
mitigation or prevention of disease or disorder in human beings or animals, as may be
specified from time to time by the Central Government by notification in the Official
Gazette, after consultation with the Board;

(c) Government Analyst means (i) in relation to [Ayurvedic, Siddha or Unani] drug, a
Government Analyst appointed by the Central Government or a State Government
under section 33F; and (ii) in relation to any other drug or cosmetic, a Government
Analyst appointed by the Central Government or a State Government under section 20;

(e) Inspector means (i) in relation to [Ayurvedic, Siddha or Unani] drug, an

Inspector appointed by the Central Government or a State Government under section
33G; and (ii) in relation to any other drug or cosmetic, an Inspector appointed by the
Central Government or a State Government under section 21;

(f)] manufacture in relation to any drug 14[or cosmetic] includes any process or part of
a process for making, altering, ornamenting, finishing, packing, labelling, breaking up or
otherwise treating or adopting any drug 14[or cosmetic] with a view to its sale or
distribution but does not include the compounding or dispensing of any drug, or the
packing of any drug or cosmetic,] in the ordinary course of retail business; and to
manufacture shall be construed accordingly;

(g)] to import, with its grammatical variations and cognate expressions means to bring
into India;

(h)] patent or proprietary medicine means, (i) in relation to Ayurvedic, Siddha or

Unani Tibb systems of medicine all formulations containing only such ingredients
mentioned in the formulae described in the authoritative books of Ayurveda, Siddha or
Unani Tibb systems of medicine specified in the First Schedule, but does not include a
medicine which is administered by parenteral route and also a formulation included in
the authoritative books as specified in clause (a); (ii) in relation to any other systems of
medicine, a drug which is a remedy or prescription presented in a form ready for internal
or external administration of human beings or animals and which is not included in the
edition of the Indian Pharmacopoeia for the time being or any other Pharmacopoeia
authorised in this behalf by the Central Government after consultation with the Drugs
Technical Advisory Board constituted under section 5;

(i) prescribed means prescribed by rules made under this Act.

3A. Construction of references to any law not in force or any functionary not in existence
in the State of Jammu and Kashmir.Any reference in this Act to any law which is not
in force, or any functionary not in existence, in the State of Jammu and Kashmir, shall,
in relation to that State, be construed as a reference to the corresponding law in force,
or to the corresponding functionary in existence, in that State.
 4. Presumption as to poisonous substances.Any substance specified as poisonous
by rule made under Chapter III or Chapter IV or Chapter IVA shall be deemed to be a
poisonous substance for the purposes of Chapter III or Chapter IV or Chapter IVA, as
the case may be.

CHAPTER II THE DRUGS TECHNICAL ADVISORY BOARD, THE CENTRAL DRUGS

LABOURATORY AND THE DRUGS CONSULTATIVE COMMITTEE

5. The Drugs Technical Advisory Board.(1) The Central Government shall, as soon as
may be, constitute a Board (to be called the Drugs Technical Advisory Board) to advise
the Central Government and the State Governments on technical matters arising out of
the administration of this Act and to carry out the other functions assigned to it by this
Act. 7 [(2) The Board shall consist of the following members, namely: (i) the Director
General of Health Services, ex officio, who shall be Chairman; (ii) the Drugs Controller,
India, ex officio; (iii) the Director of the Central Drugs Laboratory, Calcutta, ex officio; (iv)
the Director of the Central Research Institute, Kasauli, ex officio; (v) the Director of
Indian Veterinary Research Institute, Izatnagar, ex officio; (vi) the President of Medical
Council of India, ex officio; (vii) the President of the Pharmacy Council of India, ex
officio; (viii) the Director of Central Drug Research Institute, Lucknow, ex officio; (ix) two
persons to be nominated by the Central Government from among persons who are in
charge of drugs control in the States; (x) one person, to be elected by the Executive
Committee of the Pharmacy Council of India, from among teachers in pharmacy or
pharmaceutical chemistry or pharmacognosy on the staff of an Indian university or a
college affiliated thereto; (xi) one person, to be elected by the Executive Committee of
the Medical Council of India, from among teachers in medicine or therapeutics on the
staff of an Indian university or a college affiliated thereto; (xii) one person to be
nominated by the Central Government from the pharmaceutical industry; (xiii) one
pharmacologist to be elected by the Governing Body of the Indian Council of Medical
Research; (xiv) one person to be elected by the Central Council of the Indian Medical
Association; (xv) one person to be elected by the Council of the Indian Pharmaceutical
Association; (xvi) two persons holding the appointment of Government Analyst under
this Act, to be nominated by the Central Government. (3) The nominated and elected
members of the Board shall hold office for three years, but shall be eligible for
renomination and re-election: Provided that the person nominated or elected, as the
case may be, under clause (ix) or clause (x) or clause (xi) or clause (xvi) of sub-section
(2) shall hold office for so long as he holds the appointment of the office by virtue of
which he was nominated or elected to the Board. (4) The Board may, subject to the
previous approval of the Central Government, make bye-laws fixing a quorum and
regulating its own procedure and the conduct of all business to be transacted by it. (5)
The Board may constitute sub-committees and may appoint to such sub-committees for
such periods, not exceeding three years, as it may decide, or temporarily for the
consideration of particular matters, persons who are not members of the Board. (6) The
functions of the Board may be exercised notwithstanding any vacancy therein. (7) The
Central Government shall appoint a person to be Secretary of the Board and shall
provide the Board with such clerical and other staff as the Central Government
considers necessary.

6. The Central Drugs Laboratory.(1) The Central Government shall, as soon as may
be, established a Central Drugs Laboratory under the control of a Director to be
appointed by the Central Government, to carry out the functions entrusted to it by this
Act or any rules made under this Chapter: Provided that, if the Central Government so
prescribes, the functions of the Central Drugs Laboratory in respect of any drug or class
of drugs 2 [or cosmetic or class of cosmetics] shall be carried out at the Central
Research Institute, Kasauli, or at any other prescribed Laboratory and the functions of
the Director of the Central Drugs Laboratory in respect of such drug or class of drugs 2
[or such cosmetic or class of cosmetics] shall be exercised by the Director of that
Institute or of that other Laboratory, as the case may be. (2) the Central Government
may, after consultation with the Board, make rules prescribing (a) the functions of the
Central Drugs Laboratory; (d) the procedure for the submission to the said Laboratory
[under Chapter IV or Chapter IVA of samples of drugs or cosmetics for analysis or test,
the forms of Laboratorys reports thereon and the fees payable in respect of such
reports; (e) such other matters as may be necessary or expedient to enable the said
Laboratory to carry out its functions; (f) the matters necessary to be prescribed for the
purposes of the proviso to sub-section (1).

7. The Drugs Consultative Committee.(1) The Central Government may constitute an

advisory committee to be called the Drugs Consultative Committee to advise the
Central Government, the State Governments and the Drugs Technical Advisory Board
on any other matter tending to secure uniformity throughout 1 [India] in the
administration of this Act. (2) The Drugs Consultative Committee shall consist of two
representatives of the Central Government to be nominated by that Government and
one representative of each State Government to be nominated by the State
Government concerned. (3) The Drugs Consultative Committee shall meet when
required to do so by the Central Government and shall have power to regulate its own
procedure.

7A. Sections 5 and 7 not to apply to Ayurvedic, Siddha or Unani drugs.Nothing

contained in sections 5 and 7 shall apply to Ayurvedic, Siddha or Unani] drugs.

IMPORT OF DRUGS AND COSMETICS

8. Standards of quality.5 [(1) For the purposes of this Chapter, the expression
standard quality means (a) in relation to a drug, that the drug complies with the
standard set out in 6 [the Second Schedule], and (b) in relation to a cosmetic, that the
cosmetic compiles with such standard as may be prescribed]. (2) The Central
Government, after consultation with the Board and after giving by notification in the
Official Gazette not less than three months notice of its intention so to do, may by a like
notification add to or otherwise amend 6 [the Second Schedule], for the purposes of this
Chapter, and thereupon 6 [the Second Schedule] shall be deemed to be amended
accordingly.

9. Misbranded drugs.For the purposes of this Chapter a drug shall be deemed to be

misbranded (a) if it is so coloured, coated, powdered or polished that damage is
concealed or if it is made to appear of better or greater therapeutic value than it really is;
or (b) if it is not labelled in the prescribed manner; or (c) if its label or container or
anything accompanying the drug bears any statement, design or device which makes
any false claim for the drug or which is false or misleading in any particular.

9A. Adulterated drugs. For the purposes of this Chapter, a drug shall be deemed to
be adulterated. (a) if it consists, in whole or in part, of any filthy, putrid or decomposed
substance; or (b) if it has been prepared, packed or stored under insanitary conditions
whereby it may have been contaminated with filth or whereby it may have been
rendered injurious to health; or the contents injurious to health; or (d) if it bears or
contains, for purposes of colouring only, a colour other than one which is prescribed; or
(e) if it contains any harmful or toxic substance which may render it injurious to health;
or (f) if any substance has been mixed therewith so as to reduce its quality or strength.

9B. Spurious drugs. For the purposes of this Chapter, a drug shall be deemed to be
spurious (a) if it is imported under a name which belongs to another drug; or (b) if it is
an imitation of, or a substitute for, another drug or resembles another drug in a manner
likely to deceive or bears upon it or upon its label or container the name of another drug
unless it is plainly and conspicuously marked so as to reveal its true character and its
lack of identity with such other drug; or (c) if the label or the container bears the name of
an individual or company purporting to be the manufacturer of the drug, which individual
or company is fictitious or does not exist; or (d) if it has been substituted wholly or in
part by another drug or substance; or (e) if it purports to be the product of a
manufacturer of whom it is not truly a product.

9C. Misbranded cosmetics.For the purposes of this chapter, a cosmetic shall be

deemed to be misbranded (a) if it contains a colour which is not prescribed; or (b) if it
is not labelled in a prescribed manner; or (c) if the label or container or anything
accompanying the cosmetic bears any statement which is false or misleading in any
particular.
9D. Spurious cosmetics.For the purposes of this Chapter, a drug shall be deemed to
be spurious, (a) if it is imported under the name which belongs to another cosmetic;
or (b) if it is an imitation of, or is a substitute for, another cosmetic or resembles another
cosmetic in a manner likely to deceive or bears upon it or upon its label or container the
name of another cosmetic, unless it is plainly or conspicuously marked so as to reveal
its true character and its lack of identity with such other cosmetic; or (c) if the label or
the container bears the name of an individual or company purporting to be the
manufacturer of the cosmetic, which individual or company is fictitious or does not exist;
or (d) if it purports to be the product of a manufacturer of whom it is not truly a product.

10.Prohibition of import of certain drugs or cosmetics.From such date 1 as may be

fixed by the Central Government by notification in the Official Gazette in this behalf, no
person shall import (a) any drug or cosmetic which is not of standard quality; [(b) any
misbranded drug or misbranded or spurious cosmetic; (bb) any adulterated or spurious]
drug; (c) any drug or cosmetic for the import of which a licence is prescribed, otherwise
than under, and in accordance with, such licence; (d) any patent or proprietary
medicine, unless there is displayed in the prescribed manner on the label or container
thereof the true formula or list of active ingredients contained in it, together with the
quantities thereof; (e) any drug which by means of any statement, design or device
accompanying it or by any other means, purports or claims to cure or mitigate any such
disease or ailment, or to have any such other effect, as may be prescribed; (ee) any
cosmetic containing any ingredient which may render it unsafe or harmful for use under
the directions indicated or recommended; (f) any drug or cosmetic the import of which is
prohibited by rule made under this Chapter: Provided that nothing in this section shall
apply to the import, subject to prescribed conditions, of small quantities of any drug for
the purpose of examination, test or analysis or for personal use: Provided further that
the Central Government may, after consultation with the Board, by notification in the
Official Gazette, permit, subject to any conditions specified in the notification, the import
of any drug or class of drugs not being of standard quality.

10A. Power of Central Government to prohibit import of drugs and cosmetics in public
interest.Without prejudice to any other provision contained in this Chapter, if the
Central Government is satisfied that the use of any drug or cosmetic is likely to involve
any risk to human beings or animals or that any drug does not have the therapeutic
value claimed for it or contains ingredients and in such quantity for which there is no
therapeutic justification and that in the public interest it is necessary or expedient so to
do then, that Government may, by notification in the Official Gazette, prohibit the import
of such drug or cosmetic.

11. Application of law relating to sea customs and powers of Customs Officers. (1)
The law for the time being in force relating to sea customs and to goods, the import of
which is prohibited by section 18 of the Sea Customs Act, 18788 (8 of 1878) shall,
subject to the provisions of section 13 of this Act, apply in respect of drugs and
cosmetics the import of which is prohibited under this Chapter, and officers of Customs
and officers empowered under that Act to perform the duties imposed thereby on a
10[Commissioners of Customs] and other officers of Customs, shall have the same
powers in respect of such drugs and cosmetics as they have for the time being in
respect of such goods as aforesaid.

(2) Without prejudice to the provisions of sub-sections (1), the Commissioners of

Customs any officer of the Government authorized by the Central Government in this
behalf, may detain any imported package which he suspects to contain any drug 9 [or
cosmetic] the import of which is prohibited under this Chapter and shall forthwith report
such detention to the Drugs Controller, India, and, if necessary, forward the package or
sample of any suspected drug or cosmetic found therein to the Central Drugs
Laboratory.

12. Power of Central Government to make rules.(1) The Central Government may,
after consultation with or on the recommendation of the Board and after previous
publication by notification in the Official Gazette, make rules for the purpose of giving
effect to the provisions of this Chapter Provided that consultation with the Board may be
dispensed with if the Central Government is of opinion that circumstances have arisen
which render it necessary to make rules without such consultation, but in such a case
the Board shall be consulted within six months of the making of the rules and the
Central Government shall take into consideration any suggestions which the Board may
make in relation to the amendment of the said rules.

(2) Without prejudice to the generality of the forgoing power, such rules may (a)
specify the drugs or classes of drugs or cosmetics or classes of cosmetics] for the
import of which a licence is required, and prescribe the form and conditions of such
licences, the authority empowered to issue the same, the fees payable therefor and
provide for the cancellation, or suspension of such licence in any case where any
provision of this Chapter or the rules made thereunder is contravened or any of the
conditions subject to which the licence is issued is not complied with]; (b) prescribe the
methods of test or analysis to be employed in determining whether a drug or cosmetic is
of standard quality; (c) prescribe, in respect of biological and organometallic
compounds, the units or methods of standardization; (cc) prescribe under clause (d) of
5 [section 9A] the colour or colours which a drug may bear or contain for purposes or
colouring; (d) specify the diseases or ailments which an imported drug may not purport
or claim to prevent, cure or mitigate and such other effects which such drug may not
purport or claim to have; (e) prescribe the conditions subject to which small quantities of
drugs, the import of which is otherwise prohibited under this Chapter, may be imported
for the purpose of examination, test or analysis or for personal use; (f) prescribe the
places at which drugs or cosmetics may be imported, and prohibit their import at any
other place; (g) require the date of manufacture and the date of expiry of potency to be
clearly and truly stated on the label or container of any specified imported drug or class
of such drug, and prohibit the import of the said drug or class of drug after the expiry of
a specified period from the date of manufacture; (h) regulate the submission by
importers, and the securing, of samples of drugs or cosmetics for examination, test or
analysis by the Central Drugs Laboratory, and prescribe the fees, if any, payable for
such examination, test or analysis; (i) prescribe the evidence to be supplied, whether by
accompanying documents or otherwise, of the quality of drugs or cosmetics sought to
be imported, the procedure of officers of Customs in dealing with such evidence, and
the manner of storage at places of import of drugs or cosmetics detained pending
admission; (j) provide for the exemption, conditionally or otherwise, from all or any of the
provisions of this Chapter and the rules made thereunder of drugs or cosmetics
imported for the purpose only of transport through, an export from, India; (k) prescribe
the conditions to be observed in the packing in bottles, packages or other containers, of
imported drugs[or cosmetics including the use of packing material which comes into
direct contact with the drugs; (l) regulate the mode of labeling drugs or cosmetics
imported for sale in packages, and prescribe the matters which shall or shall not be
included in such labels; (m) prescribe the maximum proportion of any poisonous
substance which may be added to or contained in any imported drug, prohibit the import
of any drug in which that proportion is exceeded, and specify substances which shall be
deemed to be poisonous for the purposes of this Chapter and the rules made
thereunder; (n) require that the accepted scientific name of any specified drug shall be
displayed in the prescribed manner on the label or wrapper of any imported, patent or
proprietary medicine containing such drug; (o) provide for the exemption, conditionally
or otherwise, from all or any of the provisions of this Chapter or the rules made
thereunder, of any specified drug or class of drugs 1 [or cosmetic or class of cosmetics].

13. Offences.(1) Whoever himself or by any other person on his behalf imports, (a)
any drug deemed to be adulterated under section 9A or deemed to be a spurious drug
under section 9B or any spurious cosmetic referred to in section 9D or any cosmetic of
the nature referred to in clause (ee) of section 10 shall be punishable with imprisonment
for a term which may extend to three years and a fine which may extend to five
thousand rupees; (b) any drug or cosmetic other than a drug or cosmetic referred to in
clause (a), the import of which is prohibited under section 10, or any rule made under
this Chapter, shall be punishable with imprisonment for a term which may extend to six
months, or with fine which may extend to five hundred rupees, or with both; (c) any drug
or cosmetic in contravention of the provisions of any notification issued under section
10A, shall be punishable with imprisonment for a term which may extend to three years,
or with fine which may extend to five thousand rupees, or with both; (2) Whoever having
been convicted of an offence (a) under clause (a) or clause (c) of sub-section (1), is
again convicted of an offence under that clause, shall be punishable with imprisonment
for a term which may extend to five years, or with fine which may extend to ten
thousand rupees, or with both; (b) under clause (b) of sub-section (1), is again convicted
of an offence under that clause, shall be punishable with imprisonment for a term which
may extend to one year, or with fine which may extend to one thousand rupees, or with
both. (3) The punishment provided by this section shall be in addition to any penalty to
which the offender may be liable under the provisions of section 11.

14. Confiscation.Where any offence punishable under section 13 has been

committed, the consignment of the drugs or cosmetics in respect of which the offence
has been committed shall be liable to confiscation.

15. Jurisdiction.No Court inferior to that 4 [of a Metropolitan Magistrate or of a Judicial

Magistrate of the first class shall try an offence punishable under section 13.

MANUFACTURE, SALE AND DISTRIBUTION OF DRUGS AND COSMETICS

16. Standards of quality.(1) For the purposes of this Chapter, the expression
standard quality means (a) in relation to a drug, that the drug complies with the
standard set out in the Second Schedule, and (b) in relation to a cosmetic, that the
cosmetic complies with such standard as may be prescribed. (2) The Central
Government, after consultation with the Board and after giving by notification in the
Official Gazette not less than three months notice of its intention so to do, may by a like
notification add to or otherwise amend 7 [the Second Schedule] for the purposes of this
Chapter, and thereupon the Second Schedule shall be deemed to be amended
accordingly.

17. Misbranded drugs.For the purposes of this Chapter, a drug shall be deemed to be
misbranded, (a) if it is so coloured, coated, powdered or polished that damage is
concealed or if it is made to appear of betapeutic value than it really is; or (b) if it is not
labelled in the prescribed manner; or (c) if its label or container or anything
accompanying the drug bears any statement, design or device which makes any false
claim for the drug or which is false or misleading in any particular.

17A. Adulterated drugs.For the purposes of this Chapter, a drug shall be deemed to
be adulterated, (a) if it consists in whole or in part, of any filthy, putrid or decomposed
substance; or (b) if it has been prepared, packed or stored under insanitary conditions
whereby it may have been contaminated with filth or whereby it may have been
rendered injurious to health; or (c) if its container is composed, in whole or in part, of
any poisonous or deleterious substance which may render the contents injurious to
health; or (d) if it bears or contains, for the purposes of colouring only, a colour other
than one which is prescribed; or (e) if it contains any harmful or toxic substance which
may render it injurious to health; or (f) if any substance has been mixed therewith so as
to reduce its quality or strength.
17B. Spurious drugs.For the purposes of this Chapter, a drug shall be deemed to be
spurious, (a) if it is manufactured under a name which belongs to another drug; or (b)
if it is an imitation of, or is a substitute for, another drug or resembles another drug in a
manner likely to deceive or bears upon it or upon its label or container the name of
another drug unless it is plainly and conspicuously marked so as to reveal its true
character and its lack of identity with such other drug ; or (c) if the label or container
bears the name of an individual or company purporting to be the manufacturer of the
drug , which individual or company is fictitious or does not exist; or (d) if it has been
substituted wholly or in part by another drug or substance; or (e) if it purports to be the
product of a manufacturer of whom it is not truly a product.

17C. Misbranded cosmetics.For the purposes of this Chapter, a cosmetic shall be

deemed to be misbranded, -- (a) if it contains a colour which is not prescribed; or (b) if it
is not labelled in the prescribed manner; or (c) if the label or container or anything
accompanying the cosmetic bears any statement which is false or misleading in any
particular.

17D. Spurious cosmetics.For the purposes of this Chapter, a cosmetic shall be

deemed to be spurious,-- (a) if it is manufactured under a name which belongs to
another cosmetic; or (b) if it is an imitation of, or a substitute for, another cosmetic or
resembles another cosmetic in a manner likely to deceive or bears upon it or upon its
label or container the name of another cosmetic unless it is plainly and conspicuously
marked so as to reveal its true character and its lack of identity with such other
cosmetic; or (c) if the label or container bears the name of an individual or a company
purporting to be the manufacturer of the cosmetic which individual or company is
fictitious or does not exist; or (d) if it purports to be the product of a manufacturer of
whom it is not truly a product.

18. Prohibition of manufacture and sale of certain drugs and cosmetics.From such
date 1 as may be fixed by the State Government by notification in the Official Gazette in
this behalf, no person shall himself or by any other person on his behalf (a) 2
[manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale] or
distribute 2 [(i) any drug which is not of a standard quality, or is misbranded,
adulterated or spurious; (ii) any cosmetic which is not of a standard quality or is
misbranded or spurious; 3 [(iii) any patent or proprietary medicine, unless there is
displayed in the prescribed manner on the label or container thereof 2 [the true formula
or list of active ingredients contained in it together with the quantities thereof];] (iv) any
drug which by means of any statement, design or device accompanying it or by any
other means, purports or claims 4 [to prevent, cure or mitigate] any such disease or
ailment, or to have any such other effect as may be prescribed; 5[(v) any cosmetic
containing any ingredient which may render it unsafe or harmful for use under the
directions indicated or recommended; (vi) any drug or cosmetic in contravention of any
of the provisions of this Chapter or any rule made thereunder; (b) sell, or stock or exhibit
or offer for sale,] or distribute any drug or cosmetic which has been imported or
manufactured in contravention of any of the provisions of this Act or any rule made
thereunder; (c) manufacture for sale or for distribution, or sell, or stock or exhibit or offer
for sale, or distribute any drug 7 [or cosmetic],except under, and in accordance with the
conditions of, a licence issued for such purpose under this Chapter : Provided that
nothing in this section shall apply to the manufacture, subject to prescribed conditions,
of small quantities of any drug for the purpose of examination, test or analysis: Provided
further that the Central Government may, after consultation with the Board, by
notification in the Official Gazette, permit, subject to any conditions specified in the
notification, the manufacture for sale, or for distribution, sale, stocking or exhibiting or
offering for sale] or distribution of any drug or class of drugs not being of standard
quality.

18A. Disclosure of the name of the manufacturer, etc.Every person, not being the
manufacturer of a drug or cosmetic or his agent for the distribution thereof, shall, if so
required, disclose to the Inspector the name, address and other particulars of the
person from whom he acquired the drug or cosmetic.

18B. Maintenance of records and furnishing of information.Every person holding a

licence under clause (c) of section 18 shall keep and maintain such records, registers
and other documents as may be prescribed and shall furnish to any officer or authority
exercising any power or discharging any function under this Act such information as is
required by such officer or authority for carrying out the purposes of this Act.

19. Pleas.(1) Save as hereinafter provided in this section, it shall be no defence in a

prosecution under this Chapter to prove merely that the accused was ignorant of the
nature, substance or quality of the drug 1 [or cosmetic] in respect of which the offence
has been committed or of the circumstances of its manufacture or import, or that a
purchaser, having bought only for the purpose of test or analysis, has not been
prejudiced by the sale. (2) For the purposes of section 18 a drug shall not be deemed to
be misbranded or [adulterated or spurious] or to be below standard quality nor shall a
cosmetic be deemed to be misbranded or to be below standard quality] only by reason
of the fact that (a) there has been added thereto some innocuous substance or
ingredient because the same is required for manufacture or preparation of the drug or
cosmetic as an article of commerce in a state fit for carriage or consumption, and not to
increase the bulk, weight or measure of the drug or cosmetic or to conceal its inferior
quality or other defects; or (b) in the process of manufacture, preparation or conveyance
some extraneous substance has unavoidably become intermixed with it: Provided that
this clause shall not apply in relation to any sale or distribution of the drug or cosmetic
occurring after the vendor or distributor became aware of such intermixture. (3) A
person, not being the manufacturer of a drug or cosmetic or his agent for the distribution
thereof, shall not be liable for a contravention of section 18 if he proves (a) that he
acquired the drug or cosmetic from a duly licensed manufacturer, distributor or dealer
thereof; (b) that he did not know and could not, with reasonable diligence, have
ascertained that the drug or cosmetic in any way contravened the provisions of that
section; and (c) that the drug or cosmetic, while in his possession, was properly stored
and remained in the same state as when he acquired it.

20.Government Analysts. (1) The State Government may, by notification in the

Official Gazette, appoint such persons as it thinks fit, having the prescribed
qualifications, to be Government Analysts for such areas in the state and in respect of
such drugs or classes of drugs or such cosmetics or classes of cosmetics as may be
specified in the notification. (2) The Central Government may also, by notification in the
Official Gazette, appoint such persons as it thinks fit, having the prescribed
qualifications, to be Government Analysts in respect of such drugs or classes of drugs
or such cosmetics or classes of cosmetics as may be specified in the notification. (3)
Notwithstanding anything contained in sub-section (1) or sub-section (2), neither the
Central Government nor a State Government shall appoint as a Government Analyst
any official not serving under it without the previous consent of the Government under
which he is serving. (4) No person who has any financial interest in the import,
manufacture or sale of drugs or cosmetics shall be appointed to be a Government
Analyst under sub-section (1) or sub-section (2) of this section.

21. Inspectors.(1) The Central Government or a State Government may, by

notification in the Official Gazette, appoint such persons as it thinks fit, having the
prescribed qualifications, to be Inspectors for such areas as may be assigned to them
by the Central Government or State Government, as the case may be. (2) The powers
which may be exercised by an Inspector and the duties which may be performed by
him, the drugs or 9 [classes of drugs or cosmetics or classes of cosmetics] in relation to
which and the conditions, limitations or restrictions subject to which, such powers and
duties may be exercised or performed shall be such as may be prescribed. (3) No
person who has any financial interest in the import, manufacture or sale of drugs or
cosmetics shall be appointed to be an Inspector under this section. (4) Every Inspector
shall be deemed to be public servant within the meaning of section 21 of the Indian
Penal Code (45 of 1860), and shall be officially subordinate to such authority having the
prescribed qualifications, as the Government appointing him may specify in this behalf.

22. Powers of Inspectors.(1) Subject to the provisions of section 23 and of any rules
made by the Central Government in this behalf, an Inspector may, within the local limits
of the area for which he is appointed,(a) inspect, (i) any premises wherein any drug
or cosmetic is being manufactured and the means employed for standardising and
testing the drug or cosmetic; (ii) any premises wherein any drug or cosmetic is being
sold, or stocked or exhibited or offered for sale, or distributed; (b) take samples of any
drug or cosmetic, (i) which is being manufactured or being sold or is stocked or
exhibited or offered for sale, or is being distributed; (ii) from any person who is in the
course of conveying, delivering or preparing to deliver such drug or cosmetic to a
purchaser or a consignee; (c) at all reasonable times, with such assistance, if any, as he
considers necessary,-- (i) search any person, who, he has reason to believe, has
secreted about his person, any drug or cosmetic in respect of which an offence under
this Chapter has been, or is being, committed; or (ii) enter and search any place in
which he has reason to believe that an offence under this Chapter has been, or is being,
committed; or (iii) stop and search any vehicle, vessel or other conveyance which, he
has reason to believe, is being used for carrying any drug or cosmetic in respect of
which an offence under this Chapter has been, or is being, committed, and order in
writing the person in possession of the drug or cosmetic in respect of which the offence
has been, or is being, committed, not to dispose of any stock of such drug or cosmetic
for a specified period not exceeding twenty days, or, unless the alleged offence is such
that the defect may be removed by the possessor of the drug or cosmetic, seize the
stock of such drug or cosmetic and any substance or article by means of which the
offence has been, or is being, committed or which may be employed for the commission
of such offence; (cc) examine any record, register, document or any other material
object found 4 [with any person, or in any place, vehicle, vessel or other conveyance
referred to in clause (c)], and seize the same if he has reason to believe that it may
furnish evidence of the commission of an offence punishable under this Act or the rules
made thereunder; (cca) require any person to produce any record, register, or other
document relating to the manufacture for sale or for distribution, stocking, exhibition for
sale, offer for sale or distribution of any drug or cosmetic in respect of which he has
reason to believe that an offence under this Chapter has been, or is being, committed;
(d) exercise such other powers as may be necessary for carrying out the purposes of
this Chapter or any rules made thereunder. (2) The provisions of the Code of Criminal
Procedure, 1973 (2 of 1974) shall, so far as may be, apply to any search or seizure
under this Chapter as they apply to any search or seizure made under the authority of a
warrant issued under section 94 of the said Code. (2A) Every record, register or other
document seized under clause (cc) or produced under clause (cca) shall be returned to
the person, from whom they were seized or who produce the same, within a period of
twenty days of the date of such seizure or production, as the case may be, after copies
thereof or extracts therefrom certified by that person, in such manner as may be
prescribed, have been taken.] (3) If any person wilfully obstructs an Inspector in the
exercise of the powers conferred upon him by or under this Chapter, 2 [or refuses to
produce any record, register or other document when so required under clause (cca) of
subsection (1), he shall be punishable with imprisonment which may extend to three
years, or with fine, or with both. 23. Procedure of Inspectors.(1) Where an Inspector
takes any sample of a drug or cosmetic under this Chapter, he shall tender the fair price
thereof and may require a written acknowledgment therefor. (2) Where the price
tendered under sub-section (1) is refused, or where the Inspector seizes the stock of
any drug 3 [or cosmetic] under clause (c) of section 22, he shall tender a receipt
therefor in the prescribed form. (3) Where an Inspector takes a sample of a drug 3 [or
cosmetic] for the purpose of test or analysis, he shall intimate such purpose in writing in
the prescribed form to the person from whom he takes it and, in the presence of such
person unless he wilfully absents himself, shall divide the sample into four portions and
effectively seal and suitably mark the same and permit such person to add his own seal
and mark to all or any of the portions so sealed and marked: Provided that where the
sample is taken from premises whereon the drug or cosmetic is being manufactured, it
shall be necessary to divide the sample into three portions only: Provided further that
where the drug or cosmetic is made up in containers of small volume, instead of dividing
a sample as aforesaid, the Inspector may, and if the drug or cosmetic be such that it is
likely to deteriorate or be otherwise damaged by exposure shall, take three or four, as
the case may be, of the said containers after suitably marking the same and, where
necessary, sealing them. (4) The Inspector shall restore one portion of a sample so
divided or one container, as the case may be, to the person from whom he takes it, and
shall retain the remainder and dispose of the same as follows: (i) one portion or
container he shall forthwith send to the Government Analyst for test or analysis; (ii) the
second he shall produce to the Court before which proceedings, if any, are instituted in
respect of the drug or cosmetic; [(iii) the third, where taken, he shall send to the person,
if any, whose name, address and other particulars have been disclosed under section
18A. (5) Where an Inspector takes any action under clause (c) of section 22, (a) he
shall use all despatch in ascertaining whether or not the drug or cosmetic contravenes
any of the provisions of the section 18 and, if it is ascertained that the drug or cosmetic
does not so contravene, forthwith revoke the order passed under the said clause or, as
the case may be, take such action as may be necessary for the return of the stock
seized; (b) if he seizes the stock of the drug or cosmetic, he shall as soon as may be
inform a Judicial Magistrate and take his orders as to the custody thereof; (c) without
prejudice to the institution of any prosecution, if the alleged contravention be such that
the defect may be remedied by the possessor of the drug or cosmetic, he shall, on
being satisfied that the defect has been so remedied, forthwith revoke his order under
the said clause. (6) Where an Inspector seizes any record, register, document or any
other material object under clause (cc) of subsection (1) of section 22, he shall, as soon
as may be, inform a Judicial Magistrate and take his orders as to the custody thereof.

24. Persons bound to disclose place where drugs or cosmetics are manufactured or
kept. Every person for the time being in charge of any premises whereon any drug or
cosmetic is being manufactured or is kept for sale or distribution shall, on being required
by an Inspector so to do, be legally bound to disclose to the Inspector the place where
the drug or cosmetic is being manufactured or is kept, as the case may be.
25.Reports of Government Analysts.(1) The Government Analyst to whom a sample
of any drug or cosmetic has been submitted for test or analysis under sub-section (4) of
section 23, shall deliver to the Inspector submitting it a signed report in triplicate in the
prescribed form. (2) The Inspector on receipt thereof shall deliver one copy of the report
to the person from whom the sample was taken and another copy to the person, if any,
whose name, address and other particulars have been disclosed under section 18A,
and shall retain the third copy for use in any prosecution in respect of the sample. (3)
Any document purporting to be a report signed by a Government Analyst under this
Chapter shall be evidence to the facts stated therein, and such evidence shall be
conclusive unless the person from whom the sample was taken or the person whose
name, address and other particulars have been disclosed under section 18A has, within
twenty-eight days of the receipt of a copy of the report, notified in writing the Inspector
or the Court before which any proceedings in respect of the sample are pending that he
intends to adduce evidence in controversion of the report. (4) Unless the sample has
already been tested or analysed in the Central Drugs Laboratory, where a person has
under sub-section (3) notified his intention of adducing evidence in controversion of a
Government Analysts report, the Court may, of its own motion or in its discretion at the
request either of the complainant or the accused, cause the sample of the drug or
cosmetic produced before the Magistrate under sub-section (4) of section 23 to be sent
for test or analysis to the said Laboratory, which shall make the test or analysis and
report in writing signed by, or under the authority of, the Director of the Central Drugs
Laboratory the result thereof, and such report shall be conclusive evidence of the facts
stated therein. (5) The cost of a test or analysis made by the Central Drugs Laboratory
under sub-section (4) shall be paid by the complainant or accused as the Court shall
direct.

26. Purchaser of drug or cosmetic enabled to obtain test or analysis.Any person or

any recognised consumer association, whether such person is a member of that
association or not,] shall, on application in the prescribed manner and on payment of
the prescribed fee, be entitled to submit for test or analysis to a Government Analyst
any drug or cosmetic purchased by him or it and to receive a report of such test or
analysis signed by the Government Analyst. 8 [Explanation.For the purposes of this
section and section 32, recognised consumer association means a voluntary
consumer association registered under the Companies Act, 1956 (1 of 1956) or any
other law for the time being in force.

26A. Power of Central Government to prohibit manufacture, etc., of drug and cosmetic
in public interest. Without prejudice to any other provision contained in this Chapter, if
the Central Government is satisfied, that the use of any drug or cosmetic is likely to
involve any risk to human beings or animals or that any drug does not have the
therapeutic value claimed or purported to be claimed for it or contains ingredients and in
such quantity for which there is no therapeutic justification and that in the public interest
it is necessary or expedient so to do, then, that Government may, by notification in the
Official Gazette, prohibit the manufacture, sale or distribution of such drug or cosmetic.

27. Penalty for manufacture, sale, etc., of drugs in contravention of this Chapter.
Whoever, himself or by any other person on his behalf, manufactures for sale or for
distribution, or sells, or stocks or exhibits or offers for sale or distributes, (a) any drug
deemed to be adulterated under section 17A or spurious under section 17B or which
when used by any person for or in the diagnosis, treatment, mitigation, or prevention of
any disease or disorder is likely to cause his death or is likely to cause such harm on his
body as would amount to grievous hurt within the meaning of section 320 of the Indian
Penal Code (45 of 1860), solely on account of such drug being adulterated or spurious
or not of standard quality, as the case may be, shall be punishable with imprisonment
for a term which shall not be less than five years but which may extend to a term of life
and with fine which shall not be less than ten thousand rupees; (b) any drug (i)
deemed to be adulterated under section 17A, but not being a drug referred to in clause
(a), or (ii) without a valid licence as required under clause (c) of section 18, shall be
punishable with imprisonment for a term which shall not be less than one year but which
may extend to three years and with fine which shall not be less than five thousand
rupees: Provided that the Court may, for any adequate and special reasons to be
recorded in the judgment, impose a sentence of imprisonment for a term of less than
one year and of fine of less than five thousand rupees; (c) any drug deemed to be
spurious under section 17B, but not being a drug referred to in clause (a) shall be
punishable with imprisonment for a term which shall not be less than three years but
which may extend to five years and with fine which shall not be less than five thousand
rupees: Provided that the Court may, for any adequate and special reasons, to be
recorded in the judgment, impose a sentence of imprisonment for a term of less than
three years but not less than one year; (d) any drug, other than a drug referred to in
clause (a) or clause (b) or clause (c), in contravention of any other provision of this
Chapter or any rule made thereunder, shall be punishable with imprisonment for a term
which shall not be less than one year but which may extend to two years and with fine:
Provided that the Court may, for any adequate and special reasons, to be recorded in
the judgment impose a sentence of imprisonment for a term of less than one year.

27A. Penalty for manufacture, sale, etc., of cosmetics in contravention of this

Chapter.Whoever himself or by any other person on his behalf manufactures for sale
or for distribution, or sells, or stocks or exhibits or offers for sale (i) any cosmetic
deemed to be spurious under section 17C shall be punishable with imprisonment for a
term which may extend to three years and with fine; (ii) any cosmetic other than a
cosmetic referred to in clause (i) above in contravention of any provision of this Chapter
or any rule made thereunder shall be punishable with imprisonment for a term which
may extend to one year or with fine which may extend to one thousand rupees or with
both.

28. Penalty for non-disclosure of the name of the manufacturer, etc.Whoever

contravenes the provisions of section 18A or section 24 shall be punishable with
imprisonment for a term which may extend to one year, or with fine which may extend to
3 [one thousand rupees], or with both.

28A. Penalty for not keeping documents, etc., and for non-disclosure of information.
Whoever without reasonable cause or excuse, contravenes the provisions of section
18B shall be punishable with imprisonment for a term which may extend to one year or
with fine which may extend to one thousand rupees or with both. 28B. Penalty for
manufacture, etc., of drugs or cosmetics in contravention of section 26A.Whoever
himself or by any other person on his behalf manufactures or sells or distributes any
drug or cosmetic in contravention of the provisions of any notification issued under
section 26A, shall be punishable with imprisonment for a term which may extend to
three years and shall also be liable to fine which may extend to five thousand rupees.

29. Penalty for use of Government Analysts report for advertising.Whoever uses any
report of a test or analysis made by the Central Drugs Laboratory or by a Government
Analyst, or any extract from such report, for the purpose of advertising any drug 5 [or
cosmetic], shall be punishable with fine, which may extend to five hundred rupees.

30. Penalty for subsequent offences. 7 [(1) Whoever having been convicted of an
offence(a) under clause (b) of section 27 is again convicted of an offence under that
clause, shall be punishable with imprisonment for a term which shall not be less than
two years but which may extend to six years and with fine which shall not be less than
ten thousand rupees: Provided that the Court may, for any adequate and special
reasons to be mentioned in the judgment, impose a sentence of imprisonment for a
term of less than two years and of fine of less than ten thousand rupees; (b) under
clause (c) of section 27, is again convicted of an offence under that clause shall be
punishable with imprisonment for a term which shall not be less than six years but which
may extend to ten years and with fine which shall not be less than ten thousand rupees;
(c) under clause (d) of section 27, is again convicted of an offence under that clause
shall be punishable with imprisonment for a term which shall not be less than two years
but which may extend to four years or with fine which shall not be less than five
thousand rupees, or with both.(1A) Whoever, having been convicted of an offence
under section 27A is again convicted under that section, shall be punishable with
imprisonment for a term which may extend to two years, or with fine which may extend
to 2 [two thousand rupees], or with both. (2) Whoever, having been convicted of an
offence under section 29 is again convicted of an offence under the same section shall
be punishable with imprisonment which may extend to ten years or with fine, or with
both.

31. Confiscation.(1) Where any person has been convicted under this Chapter for
contravening any such provision of this Chapter or any rule made thereunder as may be
specified by rule made in this behalf, the stock of the drug or cosmetic in respect of
which the contravention has been made shall be liable to confiscation and if such
contravention is in respect of (i) manufacture of any drug deemed to be misbranded
under section 17, adulterated under section 17A or spurious under section 17B; or (ii)
manufacture for sale, or for distribution, sale, or stocking or exhibiting or offering for
sale, or distribution of any drug without a valid licence as required under clause (c) of
section 18; any implements or machinery used in such manufacture, sale or distribution
and any receptacles, packages or coverings in which such drug is contained and the
animals, vehicles, vessels or other conveyances used in carrying such drug shall also
be liable to confiscation.(2) Without prejudice to the provisions contained in sub-section
(1) where the Court is satisfied, on the application of an Inspector or otherwise and after
such inquiry as may be necessary that the drug or cosmetic is not of standard quality 9
[misbranded, adulterated or spurious drug or misbranded or spurious cosmetic,] such
drug or, as the case may be, such cosmetic shall be liable to confiscation.

31A. Application of provisions to Government departments.The provisions of this

Chapter except those contained in section 31 shall apply in relation to the manufacture,
sale or distribution of drugs of any department of Government as they apply in relation
to the manufacture, sale or distribution of drugs by any other person.

32. Cognizance of offence.(1) No prosecution under this Chapter shall be instituted

except by an Inspector or by the person aggrieved or by a recognised consumer
association whether such person is a member of that association or not. (2) No court
inferior to that of 1 [a Metropolitan Magistrate or of a Judicial Magistrate of the first
class] shall try an offence punishable under this Chapter. (3) Nothing contained in this
Chapter shall be deemed to prevent any person from being prosecuted under any other
law for any act or omission which constitutes an offence against this Chapter.

32A. Power of Court to implead the manufacturer, etc.Where, at any time during the
trial of any offence under this Chapter alleged to have been committed by any person,
not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof,
the Court is satisfied, on the evidence adduced before it, that such manufacturer or
agent is also concerned in that offence, then, the Court may, notwithstanding anything
contained 3 [in sub-sections (1), (2) and (3) of section 319 of the Code of Criminal
Procedure,1973 (2 of 1974)] proceed against him as though a prosecution had been
instituted against him under section 32.
33. Power of Central Government to make rules.[(1) The Central Government may
after consultation with, or on the recommendation of, the Board and after previous
publication by notification in the Official Gazette, make rules for the purpose of giving
effect to the provisions of this Chapter: Provided that consultation with the Board may
be dispensed with if the Central Government is of opinion that circumstances have
arisen which render it necessary to make rules without such consultation, but in such a
case the Board shall be consulted within six months of the making of the rules and the
Central Government shall take into consideration any suggestions which the Board may
make in relation to the amendment of the said rules.

(2) Without prejudice to the generality of the foregoing power, such rules may (a)
provide for the establishment of laboratories for testing and analysing drugs or
cosmetics; (b) prescribed the qualifications and duties of Government Analysts and the
qualifications of Inspectors; (c) prescribe the methods of test or analysis to be employed
in determining whether a drug or cosmetic is of standard quality; (d) prescribe, in
respect of biological and organometallic compounds, the units or methods of
standardisation; [(dd) prescribe under clause (d) of section 17A the colour or colours
which a drug may bear or contain for purposes of colouring; (e) prescribe the forms of
licences for the manufacture for sale or for distribution, for the sale and for the
distribution of drugs or any specified drug or class of drugs or of cosmetics or any
specified cosmetic or class of cosmetics, the form of application for such licences, the
conditions subject to which such licences may be issued, the authority empowered to
issue the same, the qualification of such authority and the fees payable therefor and
provide for the cancellation or suspension of such licences in any case where any
provision of this Chapter or the rules made thereunder is contravened or any of the
conditions subject to which they are issued is not complied with; (ee) prescribe the
records, registers or other documents to be kept and maintained under section 18B;
(eea) prescribe the fees for the inspection (for the purposes of grant or renewal of
licence) of premises, wherein any drug or cosmetic is being or is proposed to be
manufactured; (eeb) prescribe the manner in which copies are to be certified under sub-
section (2A) of section 22; (f) specify the diseases or ailments which a drug may not
purport or claim to prevent, cure or mitigate and such other effects which a drug may
not purport or claim to have; (g) prescribe the conditions subject to which small
quantities of drugs may be manufactured for the purpose of examination, test or
analysis; (h) require the date of manufacture and the date of expiry of potency to be
clearly or truly stated on the label or container of any specified drug or class of drugs,
and prohibit the sale, stocking or exhibition for sale, or distribution of the said drug or
class of drugs after the expiry of a specified period from the date of manufacture or after
the expiry of the date of potency; (i) prescribe the conditions to be observed in the
packing in bottles, packages, and other containers of drugs or cosmetics, including the
use of packing material which comes into direct contact with the drugs and prohibit the
sale, stocking or exhibition for sale, or distribution of drugs or cosmetics packed in
contravention of such conditions; (j) regulate the mode of labelling packed drugs or
cosmetics, and prescribe the matter which shall or shall not be included in such labels;
(k) prescribe the maximum proportion of any poisonous substance which may be added
or contained in any drug, prohibit the manufacture, sale or stocking or exhibition for
sale, or distribution of any drug in which that proportion is exceeded, and specify
substances which shall be deemed to be poisonous for the purposes of this Chapter
and the rules made thereunder; (l) require that the accepted scientific name of any
specified drug shall be displayed in the prescribed manner on the label or wrapper of
any patent or proprietary medicine containing such drug; [(n) prescribe the powers and
duties of Inspectors 5 [and the qualifications of the authority to which such Inspectors
shall be subordinate] and specify the drugs or classes of drugs or cosmetics or classes
of cosmetics in relation to which and the conditions, limitations or restrictions subject to
which, such powers and duties may be exercised or performed; (o) prescribe the forms
of report to be given by Government Analysts, and the manner of application for test or
analysis under section 26 and the fees payable therefor; (p) specify the offences against
this Chapter or any rule made thereunder in relation to which an order of confiscation
may be made under section 31; and (q) provide for the exemption, conditionally or
otherwise, from all or any of the provisions of this Chapter or the rules made thereunder,
of any specified drug or class of drugs or cosmetic or class of cosmetics

33A. Chapter not to apply to Ayurvedic, Siddha or Unani] drugs.Save as otherwise

provided in this Act, nothing contained in this Chapter shall apply to Ayurvedic, Siddha
or Unani drugs.

CHAPTER IVA

PROVISIONS RELATING TO AYURVEDIC, SIDDHA AND UNANI] DRUGS

33B. Application of Chapter IVA.This Chapter shall apply only to Ayurvedic, Siddha
and Unani drugs. 33C. Ayurvedic, Siddha and Unani Drugs Technical Advisory
Board.(1) The Central Government shall, by notification in the Official Gazette and
with effect from such date as may be specified therein, constitute a Board (to be called
the Ayurvedic, Siddha and Unani Drugs Technical Advisory Board to advise the Central
Government and the State Governments on technical matters arising out of this Chapter
and to carry out the other functions assigned to it by this Chapter. (2) The Board shall
consist of the(i) the Director General of Health Services, ex officio; (ii) the Drugs
Controller, India, ex officio; [(iii) the principal officer dealing with Indian systems of
medicine in the Ministry of Health, ex officio;] (iv) the Director of the Central Drugs
Laboratory, Calcutta, ex officio; (v) one person holding the appointment of Government
Analyst under section 33F, to be nominated by the Central Government; (vi) one
Pharmacognocist to be nominated by the Central Government; (vii) one Phyto-chemist
to be nominated by the Central Government; (viii) four persons to be nominated by the
Central Government, two from amongst the members of the Ayurvedic Pharmacopoeia
Committee, one from amongst the members of the Unani Pharmacopoeia Committee
and one from amongst the members of the Siddha Pharmacopoeia Committee;] (ix) one
teacher in Dravyaguna and Bhaishajya Kalpana, to be nominated by the Central
Government; (x) one teacher in ILM-UL-ADVIA and TAKLIS-WA-DAWA-SAZI, to be
nominated by the Central Government; (xi) one teacher in Gunapadam, to be
nominated by the Central Government; (xii) three persons, one each to represent the
Ayurvedic, Siddha and Unani drug industry, to be nominated by the Central
Government; (xiii) three persons, one each from among the practitioners of Ayurvedic,
Siddha and Unani Tibb system of medicine, to be nominated by the Central
Government. (3) The Central Government shall appoint a member of the Board as its
Chairman. (4) The nominated members of the Board shall hold office for three years but
shall be eligible for renomination. (5) The Board may, subject to the previous approval
of the Central Government, make bye-laws fixing a quorum and regulating its own
procedure and conduct of all business to be transacted by it. (6) The functions of the
Board may be exercised notwithstanding any vacancy therein. (7) The Central
Government shall appoint a person to be Secretary of the Board and shall provide the
Board with such clerical and other staff as the Central Government considers
necessary.

33D. The Ayurvedic, Siddha and Unani Drugs Consultative Committee.(1) The
Central Government may constitute an Advisory Committee to be called the Ayurvedic,
Siddha and Unani Drugs Consultative Committee to advise the Central Government, the
State Governments and the Ayurvedic, Siddha and Unani Drugs Technical Advisory
Board on any matter for the purpose of securing uniformity throughout India in the
administration of this Act in so far as it relates to Ayurvedic, Siddha or Unani drugs. (2)
The Ayurvedic, Siddha and Unani Drugs Consultative Committee shall consist of two
persons to be nominated by the Central Government as representatives of that
Government and not more than one representative of each State to be nominated by
the State Government concerned. (3) The Ayurvedic, Siddha and Unani Drugs
Consultative Committee shall meet when required to do so by the Central Government
and shall regulate its own procedure.

33E. Misbranded drugs.For the purposes of this Chapter, an Ayurvedic, Siddha or

Unani drugs shall be deemed to be misbranded. (a) if it is so coloured, coated, powered
or polished that damage is concealed, or if it is made to appear of better or greater
therapeutic value than it really is; or (b) if it is not labelled in the prescribed manner; or
(c) if its label or container or anything accompanying the drug bears any statement,
design or device which makes any false claim for the drug or which is false or
misleading in any particular.
33EE. Adulterated drugs.For the purposes of this Chapter, an Ayurvedic, Siddha or
Unani drug shall be deemed to be adulterated, (a) if it consists, in whole or in part, of
any filthy, putrid or decomposed substance; or (b) if it has been prepared, packed or
stored under insanitary conditions whereby it may have been contaminated with filth or
whereby it may have been rendered injurious to health; or (c) if its container is
composed, in whole or in part, of any poisonous or deleterious substance which may
render the contents injurious to health; or (d) if it bears or contains, for purposes of
coloring only, a colour other than one which is prescribed; or (e) if it contains any
harmful or toxic substance which may render it injurious to health; or (f) if any substance
has been mixed therewith so as to reduce its quality or strength. Explanation.For the
purpose of clause (a), a drug shall not be deemed to consist, in whole or in part, of any
decomposed substance only by reason of the fact that such decomposed substance is
the result of any natural decomposition of the drug: Provided that such decomposition is
not due to any negligence on the part of the manufacturer of the drug or the dealer
thereof and that it does not render the drug injurious to health.

33EEA. Spurious drugs.For the purposes of this Chapter, an Ayurvedic, Siddha or

Unani drug shall be deemed to be spurious (a) if it is sold, or offered or exhibited for
sale, under a name which belongs to another drug; or (b) if it is an imitation of, or is a
substitute for, another drug or resembles another drug in a manner likely to deceive, or
bears upon it or upon its label or container the name of another drug, unless it is plainly
and conspicuously marked so as to reveal its true character and its lack of identity with
such other drug; or (c) if the label or container bears the name of an individual or
company purporting to be the manufacturer of the drug, which individual or company is
fictitious or does not exist; or (d) if it has been substituted wholly or in part by any other
drug or substance; or (e) if it purports to be the product of a manufacturer of whom it is
not truly a product.

33EEB. Regulation of manufacture for sale of Ayurvedic, Siddha and Unani drugs.No
person shall manufacture for sale or for distribution any Ayurvedic, Siddha or Unani
drug except in accordance with such standards, if any, as may be prescribed in relation
to that drug.

33EEC. Prohibition of manufacture and sale of certain Ayurvedic, Siddha and Unani
drug.From such date as the State Government may, by notification in the Official
Gazette, specify in this behalf, no person, either by himself or by any other person on
his behalf, shall (a) manufacture for sale or for distribution (i) any misbranded,
adulterated or spurious Ayurvedic, Siddha or Unani drugs; (ii) any patent or proprietary
medicine, unless there is displayed in the prescribed manner on the label or container
thereof the true list of all the ingredients contained in it; and (iii) any Ayurvedic, Siddha
or Unani drug in contravention of any of the provisions of this Chapter or any rule made
thereunder; (b) sell, stock or exhibit or offer for sale or distribute, any Ayurvedic, Siddha
or Unani drug which has been manufactured in contravention of any of the provisions of
this Act, or any rule made thereunder; (c) manufacture for sale or for distribution, any
Ayurvedic, Siddha or Unani drug, except under, and in accordance with the conditions
of, a licence issued for such purpose under this Chapter by the prescribed authority:
Provided that nothing in this section apply to Vaidyas and Hakims who manufacture
Ayurvedic, Siddha or Unani drug for the use of their own patients: Provided further that
nothing in this section shall apply to the manufacture, subject to the prescribed
conditions, of small quantities of any Ayurvedic, Siddha or Unani drug for the purpose of
examination, test or analysis. 33EED. Power of Central Government to prohibit
manufacture, etc., of Ayurvedic, Siddha or Unani drugs in public interest.Without
prejudice to any other provision contained in this Chapter, if the Central Government is
satisfied on the basis of any evidence or other material available before it that the use of
any Ayruvedic, Siddha or Unani drug is likely to involve any risk to human beings or
animals or that any such drug does not have the therapeutic value claimed or purported
to be claimed for it and that in the public interest it is necessary or expedient so to do
then, that Government may, by notification in the Official Gazette, prohibit the
manufacture, sale or distribution of such drug.

33F. Government Analysts.(1) The Central Government or a State Government may,

by notification in the Official Gazette, appoint such persons as it thinks fit, having the
prescribed qualifications, to be Government Analysts for such areas as may be
assigned to them by the Central Government or the State Government, as the case may
be. (2) Notwithstanding anything contained in sub-section (1), neither the Central
Government nor a State Government shall appoint as a Government Analyst any official
not serving under it without the previous consent of the Government under which he is
serving. (3) No person who has any financial interest in the manufacture or sale of any
drug shall be appointed to be a Government Analyst under this section.

33G. Inspectors.(1) The Central Government or a State Government may, by

notification in the Official Gazette, appoint such persons as it thinks fit, having the
prescribed qualifications, to be Inspectors for such areas as may be assigned to them
by the Central Government or the State Government, as the case may be. (2) The
powers which may be exercised by an Inspector and the duties which may be
performed by him and the conditions, limitations or restrictions subject to which such
powers and duties may be exercised or performed shall be such as may be prescribed.
(3) No person who has any financial interest in the manufacture or sale of any drug shall
be appointed to be an Inspector under this section. (4) Every Inspector shall be deemed
to be a public servant within the meaning of section 21 of the Indian Penal Code (45 of
1860) and shall be officially subordinate to such authority as the Government appointing
him may specify in this behalf.
33H. Application of provisions of sections 22, 23, 24 and 25.The provisions of
sections 22, 23, 24 and 25 and the rules, if any, made thereunder shall, so far as may
be, apply in relation to an Inspector and a Government Analyst appointed under this
Chapter as they apply in relation to an Inspector and a Government Analyst appointed
under Chapter IV, subject to the modification that the references to drug in the said
section, shall be construed as references to Ayurvedic, Siddha or Unani drugs.

33-I. Penalty for manufacture, sale, etc., of Ayurvedic, Siddha or Unani drug in
contravention of this Chapter Whoever himself or by any other person on his behalf
(1) manufactures for sale or for distribution, (a) any Ayurvedic, Siddha or Unani
drug(i) deemed to be adulterated under section 33EE, or (ii) without a valid licence as
required under clause (c) of section 33EEC, shall be punishable with imprisonment for a
term which may extend to one year and with fine which shall not be less than two
thousand rupees; (b) any Ayurvedic, Siddha or Unani drug deemed to be spurious
under section 33EEA, shall be punishable with imprisonment for a term which shall not
be less than one year but which may extend to three years and with fine which shall not
be less than five thousand rupees: Provided that the Court may, for any adequate and
special reasons to be mentioned in the judgment, impose a sentence of imprisonment
for a term of less than one year and of fine of less than five thousand rupees; or (2)
contravenes any other provisions of this Chapter or of section 24 as applied by section
33H or any rule made under this Chapter, shall be punishable with imprisonment for a
term which may extend to three months and with fine which shall not be less than five
hundred rupees.

33J. Penalty for subsequent offences.Whoever having being convicted of an

offence, (a) under clause (a) of sub-section (1) of section 33-I is again convicted of an
offence under that clause, shall be punishable with imprisonment for a term which may
extend to two years and with five which shall not be less than two thousand rupees; (b)
under clause (b) of sub-section (1) of section 33-I is again convicted of an offence under
that clause, shall be punishable with imprisonment for a term which shall not be less
than two years but which may extend to six years and with fine which shall not be less
than five thousand rupees: Provided that the Court may, for any adequate and special
reasons to be mentioned in the judgment, impose a sentence of imprisonment for a
term of less than two years and of fine of less than five thousand rupees; (c) under sub-
section (2) of section 33-I is again convicted of an offence under that sub-section, shall
be punishable with imprisonment for a term which may extend to six months and with
fine which shall not be less than one thousand rupees.

33K. Confiscation.Where any person has been convicted under this Chapter, the
stock of the Ayurvedic, Siddha or Unani drug, in respect of which the contravention has
been made, shall be liable to confiscation.
33L. Application of provisions to Government departments.The provisions of this
Chapter except those contained in section 33K shall apply in relation to the manufacture
for sale, sale or distribution of any Ayurvedic, Siddha or Unani drug by any department
of Government as they apply in relation to the manufacture for sale, sale or distribution
of such drug by any other person.

33M. Cognizance of offences.(1) No prosecution under this Chapter shall be instituted

except by an Inspector with the previous sanction of the authority specified under sub-
section (4) of section 33G. (2) No Court inferior to that of a Metropolitan Magistrate or of
a Judicial Magistrate of the first class shall try an offence punishable under this Chapter.

33N. Power of Central Government to make rules.(1) The Central Government may,
after consultation with, or on the recommendation of, the Board and after previous
publication by notification in the Official Gazette, make rules for the purpose of giving
effect to the provisions of this Chapter: Provided that consultation with the Board may
be dispensed with if the Central Government is of opinion that circumstances have
arisen which render it necessary to make rules without such consultation, but in such a
case, the Board shall be consulted within six months of the making of the rules and the
Central Government shall take into consideration any suggestions which the Board may
make in relation to the amendment of the said rules. (2) Without prejudice to the
generality of the foregoing power, such rules may (a) provide for the establishment of
laboratories for testing and analysing Ayurvedic, Siddha or Unani drugs; (b) prescribe
the qualification and duties of Government Analysts and the qualifications of Inspectors;
(c) prescribe the methods of test or analysis to be employed in determining whether any
Ayurvedic, Siddha or Unani drug is labelled with the true list of the ingredients which it is
purported to contain; (d) specify any substance as a poisonous substance; (e) prescribe
the forms of licences for the manufacture for sale of Ayurvedic, Siddha or Unani
drugs,and for sale of processed Ayurvedic, Siddha or Unani drugs, the form of
application for such licences, the conditions subject to which such licences may be
issued, the authority empowered to issue the same and the fees payable therefor; and
provide for the cancellation or suspension of such licences in any case where any
provision of this Chapter or rules made thereunder is contravened or any of the
conditions subject to which they are issued is not complied with; (f) prescribe the
conditions to be observed in the packing of Ayurvedic, Siddha and Unani drugs
including the use of packing material which comes into direct contact with the drugs,
regulate the mode of labelling packed drugs and prescribe the matters which shall or
shall not be included in such labels; (g) prescribe the conditions subject to which small
quantities of Ayurvedic, Siddha or Unani drugs may be manufactured for the purpose of
examination, test or analysis; (gg) prescribe under clause (d) of section 33EE the colour
or colours which an Ayurvedic, Siddha or Unani drug may bear or contain for purposes
of colouring; (gga) prescribe the standards for Ayurvedic, Siddha or Unani drugs under
section 33EEB;] and (h) any other matter which is to be or may be prescribed under this
Chapter.

33-O. Power to amend First Schedule.The Central Government, after consultation

with the Board and after giving, by notification in the Official Gazette, not less than three
months notice of its intention so to do, may, by a like notification, add to or otherwise
amend the First Schedule for the purposes of this Chapter and thereupon the said
Schedule shall be deemed to be amended accordingly.

CHAPTER V -MISCELLANEOUS

33P. Power to give directions.The Central Government may give such directions to
any State Government as may appear to the Central Government to be necessary for
carrying into execution in the State any of the provisions of this Act or of any rule or
order made thereunder.

34. Offences by companies.(1) Where an offence under this Act has been committed
by a company, every person who at the time the offence was committed, was in charge
of, and was responsible to the company for the conduct of the business of the company,
as well as the company shall be deemed to be guilty of the offence and shall be liable to
be proceeded against and punished accordingly: Provided that nothing contained in this
sub-section shall render any such person liable to any punishment provided in this Act if
he proves that the offence was committed without his knowledge or that he exercised all
due diligence to prevent the commission of such offence. (2) Notwithstanding anything
contained in sub-section (1), where an offence under this Act has been committed by a
company and it is proved that the offence has been committed with the consent or
connivance of, or is attributable to any neglect on the part of, any director, manager,
secretary or other officer of the company, such director, manager, secretary or other
officer shall also be deemed to be guilty of that offence and shall be liable to be
proceeded against and punished accordingly: Explanation.For the purposes of this
section (a) company means a body corporate, and includes a firm or other
association of individuals; and (b) director in relation to a firm means a partner in the
firm.

34A. Offences by Government Departments.Where an offence under Chapter 1V or

Chapter 1VA has been committed by any department of Government, such authority as
is specified by the Central Government to be in charge of manufacture, sale or
distribution of drugs or where no authority is specified, the head of the department, shall
be deemed to be guilty of the offence and shall be liable to be proceeded against and
punished accordingly: Provided that nothing contained in this section shall render any
such authority or person liable to any punishment provided in Chapter 1V or Chapter
1VA, as the case may be, if such authority or person proves that the offence was
committed without its or his knowledge or that such authority or person exercised all
due diligence to prevent the commission of such offence.

34AA. Penalty for vexatious search or seizure.Any Inspector exercising powers under
this Act or the rules made thereunder, who, (a) without reasonable ground of
suspicion searches any place, vehicle, vessel or other conveyance; or (b) vexatiously
and unnecessarily searches any person; or (c) vexatiously and unnecessarily seizes
any drug or cosmetic, or any substance or article, or any record, register, document or
other material object; or (d) commits, as such Inspector, any other act, to the injury of
any person without having reason to believe that such act is required for the execution
of his duty, shall be punishable with fine which may extend to one thousand rupees.

35. Publication of sentences passed under this Act. (1) If any person is convicted of
an offence under this Act, the Court before which the conviction takes place shall, on
application made to it by the Inspector, cause the offenders name, place of residence,
the offence of which he has been convicted and the penalty which has been inflicted
upon him, to be published at the expense of such person in such newspapers or in such
other manner as the Court may direct. (2) The expenses of such publication shall be
deemed to form part of the cost relating to the conviction and shall be recoverable in the
same manner as those costs are recoverable.

36. Magistrates power to impose enhanced penalties.Notwithstanding anything

contained in the Code of Criminal Procedure, 1973 (2 of 1974) it shall be lawful for any
Metropolitan Magistrate or any Judicial Magistrate of the first class to pass any
sentence authorised by this Act in excess of his powers under said Code.

36A. Certain offences to be tried summarily.Notwithstanding anything contained in the

Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Act, punishable
with imprisonment for a term not exceeding three years, other than an offence under
clause (b) of sub-section (1) of section 33-I, shall be tried in a summary way by a
Judicial Magistrate of the first class specially empowered in this behalf by the State
Government or by a Metropolitan Magistrate and the provisions of sections 262 to 265
(both inclusive) of the said Code shall, as far as may be, apply to such trial: Provided
that, in the case of any conviction in a summary trial under this section, it shall be lawful
for the Magistrate to pass a sentence of imprisonment for a term not exceeding one
year: Provided further that when at the commencement of, or in the course of, a
summary trial under this section it appears to the Magistrate that the nature of the case
is such that a sentence of imprisonment for a term exceeding one year may have to be
passed or that it is, for any other reason, undesirable to try the case summarily, the
Magistrate shall, after hearing the parties, record an order to that effect and thereafter
recall any witness who has been examined and proceed to hear or rehear the case in
the manner provided by the said Code.
37. Protection of action taken in good faith.No suit, prosecution or other legal
proceeding shall lie against any person for anything which is in good faith done or
intended to be done under this Act.

38. Rules to be laid before Parliament.Every rule made under this Act shall be laid as
soon as may be after it is made before each House of Parliament while it is in session
for a total period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid], both Houses agree in making any
modification in the rule or both Houses agree that the rule should not be made, the rule
shall thereafter have effect only in such modified from or be of no effect, as the case
may be; so however that any such modification or annulment shall be without prejudice
to the validity of anything previously done under that rule
UNIT- III: Corruption:

a. Practice and dimensions of Corruption:

Just as it is impossible not to taste honey or poison that one may find at the tip of ones
tongue, so it is impossible for one dealing with government funds not to taste, at least a
little bit, of the Kings wealth.

Just as it is impossible to know when a fish moving in water is drinking it, so it is

impossible to find out when government servants in charge of undertakings
misappropriate moneyKautilya: Arthshastra

The only definition that can be given of morality is this: That which is selfish is immoral
and that which is unselfish is moral.Swami Vivekananda

Corruption is recognised as the single biggest problem facing the country today.
Corruption has serious adverse effects on the society and the economy and corrodes
the moral fibre of the people. UN Secretary-General Kofi Annan observed at the time of
adoption of the Convention against Corruption:Corruption is an insidious plague that
has a wide range of corrosive effects on societies. It undermines democracy and the
rule of law, leads to violations of human rights, distorts markets, erodes the quality of life
and allows organised crime, terrorism and other threats to human security to flourish.

Corruption is a symbol of something gone wrong in the management of the state. It

undermines the legitimacy of the government as people develop cynicism against it.
India is today regarded as one of the most corrupt countries of the world, where
foreigners dread to do business. The Transparency International (2009) ranks India at
the 85th place out of 185 countries, with a CPI (Corruption Perception Index) score of
3.4 in the company of many failed states.

The Transparency International defines corruption as misuse of public power for private
benefit. The Santhanam Committee described corruption as improper or selfish
exercise of power and influence attached to public office or to the special position one
occupies in public life. A more comprehensive definition of corruption given by experts
is as follows: When a public official, in violation of the trust placed on him by the public,
and in a manner which harms the public interest, knowingly engages in a conduct which
exploits the office for clear personal and private gain in a way which runs contrary to
accepted rules and the standard of conduct of pubic office within the political culture, so
as to benefit a third party by providing him with access to a good or service which he
would not otherwise obtain.

Adverse Effects of Corruption-THE first is bureaucratic corruption which is due to

softness of the state comprising all manner of social indiscipline that prevents effective
government and obstructs national development. Nothing gets done without some form
of bribery, gift, favour or other benefit. This imposes a serious cost on the society: a)
there is loss of revenues from tax and duties and excessively high public expenditure
due to its leakage; b) there is reduction in productive investment and growth through
abuse of regulatory powers; c) there are costs to the public due to bribe extraction in
delivery of services and poor quality of access to services; d) there is loss of confidence
in public institutions as corruption can undermine the rule of law, tax compliance,
respect for contracts, civil order and safety and ultimately the legitimacy of the state
itself. The poor are the worst sufferers of corruption as it leads to deprivation of basic
services like primary education for the children and elementary health care as public
officials refuse to provide them without payment of illegal gratification.

The second is the growing influence of money in political life. The most disturbing is the
direct buying power of money to secure the vote of the electors and elected politicians
to swing elections and legislators and influence party actions through legal and illegal
campaign contributions. Corruption in the media is linked to political corruption as it
plays an increasingly important role in influencing elections. Politicians and political
parties purchase commercial space and time in the mass media and plant paid news to
hoodwink the reader.

The third aspect of corruption is generation of the black economy and laundering of
money worldwide. In India today the black economy has become all-pervasive, affecting
the day-to-day life of the common man. Black money is commonly understood as
money on which income-tax is not paid but it is much more than that, and involves
various kinds of illegal activities, such as bribery, drug money, illegal traffic in arms. The
black economy as a percentage of the national income, which was around three per
cent to seven per cent in the fifties and sixties, was estimated to have grown to 40 per
cent towards the end of the last century, and is currently estimated to be 50 per cent of
the GDP. This results in a huge loss of direct tax revenue, fiscal crisis and rise in the
debt burden. Investment gets diverted to unproductive sectors and a large chunk of
resources is not only wasted but is either lying idle or is siphoned out of the country.
Global Financial Integrity has estimated that between 1948-2008, $ 462 billion (adjusted
to current prices) has been the extent of illicit flows out of the country due to tax
evasion, corruption, bribery, criminal activities etc. There is a countrywide outrage. Baba
Ramdev has launched a nationwide agitation to pressurise the government to bring the
money back. Due to the huge black economy, modern India does not present the image
of a civilised society.

Today money laundering has become a big international racket and feeds organised
transnational crime which includes terrorism, black market trade in arms and nuclear
material, drug trafficking etc. The objective is to conceal the true ownership of illegally-
obtained money and its placement, layering and integration in regular banking channels.
Dirty money moves to weak political systems where controls are ineffective. Drug
trafficking is rampant in Afghanistan, Myanmar and Laos, known as the golden triangle
and feeds terrorist activities of the Taliban and other terrorists groups in Afghanistan
and North-West Pakistan, and sabotages governments, banking systems and legitimate
businesses, and also poses a serious security threat to India. In some South American
countries such as Columbia powerful cocaine cartels manipulate political systems with
drug money in what has become narco-democracies. Illegal manipulation of the worlds
financial markets leaves the national economies increasingly vulnerable.

Part I Understanding Corruption Causes and Remedies

Types of Corruption

In order to understand the nature of corruption we need to distinguish two types of

corruption: coercive and collaborative.

Coercive Corruption is one where a person is forced to give bribe to get a job done to
which he is otherwise entitled such as getting a ration card, a driving licence, a
passport, an electric connection or sanction for constructing a building. Such corruption
is endemic to the way the government carries out its routine activities such as issue of
licence, permit, policing and revenue collection. Payments are generally of petty nature,
to lower level inspectors, babus and clerks, and the payoff facilitates benefits to which
one is otherwise legally entitled.

Collaborative Corruption is one involving high officials and Ministers that often implicate
multinationals and large domestic firms, in which both parties gain substantial pecuniary
benefits, though the public is the ultimate loser. They mostly relate to mega-projects,
large-value contracts, concessions and other favours and difficult-to-prove nexus, as
both the bribe-givers and takers are the beneficiaries.

While both the coercive and collaborative corruptions are interrelated, and it is not easy
to draw a dividing line, the countries which are rated as very corrupt have a high
incidence of coercive corruption, where corruption is insti-tutionalised and citizens have
to pay bribe for even basic services to which they are entitled, making day-to-day life
difficult. Alexandra Wrage, who heads an international anti-bribery association, makes
the following observations on the creativity and tenacity of government officials who
demand bribe:

They ask for the cash, of course, and wire transfers to numbered accounts. They ask for
sweet-heart deals on real estates. They ask for women to be sent to their rooms. They
ask for jobs for their children, scholarships for favoured nephews, and medical care for
ailing wives. They set up shell companies, off-shore accounts, phony charities, trusts in
the name of their family members, and committees that they can manage for their own
benefit Businessmen dont speak about these government officialsfrom grasping
and clumsy to powerful and frighteningbecause they are the customer. Companies
dont speak against them for fear of losing current contract or jeopardising future
business. They believe they have to pay to play. Few locals speak against them
because they are complicit, cynical or terrified Too little is being done to reduce
corruption because the act is often several steps removed from the victim, making it
difficult for public outrage to gain momentum.
High Cost of Small Bribes

Small and routine bribe can have a terrible cost for the society. A fishing village in
Raigadh distict in Maharastra was a favourite landing ground of smugglers as the
customs and police officials were reported to be on their payroll. Crates of RDX and
ammunition were smuggled through this port by Dawood Ibrahim and Memon who were
the mastermind behind the Bombay blast of 1993 leading to the terrible loss of over 250
lives and valuable property worth thousands of crores. The customs and police officials
were most probably unaware of the content of cargo they were illegally allowing in, and
its intended use.

In August 2004 two Chechnyan women boarded separate planes at Moscow carrying
bombs. Neither woman held tickets on arrival at the airport after registration had closed.
Both purchased tickets under the table from an airport agent for US $ 175 out of which $
30 went to bribe the Siberian agent. Both women were cleared by the security guards at
the airport with their carry-on luggage. It was not clear whether failure of security to
uncover the bombs was a result of incompetence or additional bribes. Just minutes after
the take-off, the women detonated the bombs they had smuggled in, blowing up both
planes and killing a total of ninety passengers.

High Level Corruption

Corruption at high places has been the hallmark of the Indian political scene during the
last 30 years and has attracted a great deal of public and media attention. Rajiv Gandhi,
who came to power with a thumping majority, lost the next round of elections in the
wake of scandals relating to defence deals such as Bofors guns and HDW submarine.
The term of the Narasimha Rao Government was marked by mega scandals such as
the Harsad Mehta security scam, Jain hawala case, urea import by NFL/ Karsan and
JMM MPs bribery case. Sukh Ram, the Communications Minister in Raos govern-
ment, made history of sorts when suit-cases with currency notes worth several crores
were recovered in a CBI raid in his house. Laloo Prasad Yadav, who was the Chief
Minister of Bihar, was embroiled in an Animal Husbandry scandal. However, despite the
scandal his party won the next round of elections and he/his wife became the Chief
Minister. The National Democratic Alliance, led by the BJP with Atal Behari Vajpayee as
the Prime Minister, which came to power in 1999 on the slogan of a government that is
different, could not bring an administrative culture different from the previous Congress
governments. The tehelka-tapes on defence deals exposed how some key functionaries
of the government were embedded in corruption in utter disregard of national security.

The present UPA Government, headed by Manmohan Singh, is regarded as the most
corrupt government in post-independence history. It is embroiled in major corruption
scandals such as the 2G spectrum allocation, Commonwealth Games, cash-for-vote in
the confidence-vote on the Indo-US nuclear treaty. The State governments are equally
embroiled in unsavoury controversies. The Mayawati Govern-ment in UP has acquired
agricultural land at throwaway prices in Greater Noida from hapless farmers and palmed
it off to builders for luxury housing at fancy prices. The BJP Government of B.S.
Yeddyurappa in Karnataka is alleged to have taken huge money to allow illegal mining
of vast tracts of forest land depleting the ecology of the area.

The problem with high-level corruption is that it corrodes the entire administrative
machine of the state. It sends a wrong message to lower level bureaucracy who are
emboldened to indulge in corrupt and illegal activities secure in the fact that no punitive
action will be taken against them. Robert Rotberg, an expert, explains:

Lesser officials and politicians steal from the state and cheat their fellow citizens
because of a prevailing permissive ethos. If their immediate superiors steal and cheat,
lower ranked civil servants and security personnel believe that they, too, have a license
to enrich themselves corruptly. Once it becomes known that certain kinds or all kinds of
corrupt behaviour are acceptable, then all the self-interested maximisers will hardly
want to miss good opportunities to secure and then to employ official positions for
private gain. Whatever ones views on human nature and human fallibility, if the
prevailing political culture tolerates corruption, nearly everyone will seek opportunities to
be corrupt.

What Encourages Corruption and Preventive Measures

We need to analyse the reasons for corruption so that we devise methods to fight it.
They are:

1. The weak laws and regulations to punish the guilty due to which corruption has
become a high-reward and low-risk activity.

2. The system of fighting elections in which money power plays a decisive role.
3. The economic policies and rules and procedures of conduct of the business of
government.

4. The hold of big business, corporates and multinationals on the government, largely
due to the model of economic development we have adopted.

5. The societal and cultural attitude and the values of society and its moral standard.

The Weak Legal Framework for Punitive Action

It is often said that in India corruption thrives because it is a low-risk and high-profit
business. There are so many safeguards and protections in the system in which a
public servant operates, that it is very difficult to catch and punish an official indulging in
corruption. To deal with corruption amongst public servants, a Prevention of Corruption
Act (PCA) 1988 was enacted, which replaced the PCA Act of 1947. The Act widened
the scope of definition of public servants and public duty and brought elected
representatives, such as MPs and MLAs, within its purview. However, the judicial
process in India is slow and time-consuming. Cushions of safety have been built in the
legal system on the principle that everybody is innocent till proved guilty. The legal
provisions are exploited by the corrupt to escape punishment. The CBI alone has
hundreds of cases pending in various courts under the Prevention of Corruption Act,
some of them as old as 25 years. The conviction rate of criminal cases in India is hardly
six per cent. The Prevention of Corruption Act hardly serves as a deterrence. There is
also a statutory bar that the CBI cannot prosecute a public servant of the rank of Joint
Secretary and above without prior government permissionthe government often
delays or prevaricates in giving sanction, thus effectively barring the trial of the guilty
official.

N. Vittal, a former Central Vigilance Commis-sioner (CVC), says that we cannot control
corruption unless we increase the risk for the corrupt. A corrupt person can engage the
best lawyer using the money he got through illegal means and defend himself in a
departmental enquiry or in a court of law and exploit the loopholes in the system. There
is need for an Act which will provide for the seizure of the ill-gotten property of a corrupt
public servant that will cripple him financially. An Act to this effectthe Corrupt Public
Servants (Forfeiture of Property) Actwas drafted by the Law Commission at the
initiative of the Vigilance Commission but is pending with the government for securing
legislative approval since 1999. The bulk of the ill-gotten wealth of the people who are
corrupt is in the form of benami property or benami bank accounts. The Benami
Transaction Prohibition Act, promulgated in 1988, stipulates that benami property can
be confiscated by the government under the provisions of the rules to be framed under
the Act. However, the government has not framed the rules; thus the Act is non-
operational. It is apparent that the government is not serious in fighting corruption.

The Crusade against Corruption Jan Lokpal Bill

Tired over the governments inaction against corruption and bringing the guilty to book,
a movement has been launched under the leadership of the veteran social activist,
Anna Hazare; this has garnered massive support all over the country. The government
finally announced that a Bill will be brought in Parliament in the monsoon session of
2011 and agreed to discuss its terms with civil society leaders. A proposal for Jan
Lokpal is pending in Parliament since 1968 but for want of political will it could not be
enacted. The key features of a strong Lokpal Bill, proposed by the civil society, are as
follows: it should be a multi-member body completely independent of the government
and its members be selected by an independent panel; it will have its own independent
investigating and prosecuting agencyall anti-corruption agencies such as the CVC,
CBI, ACB will function under its wing and it will complete the enquiry in a time-bound
manner. There will be Special Courts for trial and punishment of persons found guilty
and it will have the power to recover illegal money and assets amassed by guilty public
servants. There should be a single Act which will constitute separate Lokpal and
Lokayuktas at the Centre and in the States to deal with Central and State public
servants and all public servants, including lower level functionaries, should be brought
under its umbrella. An independent, empowered Lokpal/ Lokayukta, who can mete out
swift and exemplary punishment to corrupt public servants, will be a major step forward
to clean up the countrys body politic.

Political CorruptionThe Electoral Process and Reform

It is widely recognised that the huge money required to fight elections is the foundation
of political corruption. Due to the vast geographical area of a constituency, with more
than two million voters in many cases, a candidate has to spend huge money to contest
the elections. A good part of this money comes from business houses, who expect quid
pro quo in the form of opportunities to make black money and other favours. There are
several other problems with our electoral system such as the flaw in the electoral rolls,
lack of voters education, booth capturing and intimidation of voters. The most serious
problem relates to persons with criminal background getting elected. As many as 128
MPs facing criminal charges were elected to the 14th Lok Sabha and 162 MPs to the
15th Lok Sabha. In the Jharkhand Assembly elections held in 2009, 70 per cent MLAs
had criminal cases pending against them. There is a need to ban persons facing
criminal charges from seeking any electoral office (at least those against whom the
Court has framed charges for serious crimes, for which the punishment of imprisonment
could be five years).

The existing first-past-the-post system, under which the person securing the highest
votes gets elected, makes a mockery of representative democracy. According to a study
made of the 2009 Lok Sabha elections, out of the 543 MPs elected, 78 per cent were
elected with less than 50 per cent votes cast, and 98 per cent with less than 50 per cent
registered votes. The Law Commission and National Commission to Review the
Working of the Constitution have expressed views in favour of devising a system under
which only a candidate, who has polled a minimum of 50 per cent votes, should be
elected. A political science expert, Jagdeep Chohokar, says that this can be secured by
having a provision of negative voting and inserting a column in the ballot paper none-of-
the-above. In case none-of-the above option gets maximum votes, fresh elections
should be held, and the cycle be repeated till a candidate securing 50 per cent votes is
found (none of the defeated candidates should be allowed to contest again). This
system will reduce the sectarian effect of vote-bank and force the political parties to put
up better candidates.

Several other suggestions have been made to reform the electoral process. There
should be small constituencies, with one or two lakh voters, so that the voters know the
candidates background and the role of money power is minimised. Some kind of
representative system among the candidates elected will have to be worked out to
keep the numbers in Parliament/Assembly manageable. A suggestion has also been
made that direct elections should be held only at the level of Panchayat and Zilla
Parishad which, in turn, may elect representatives for the State Assembly and
Parliament. Another suggestion is for state funding of elections to recognised political
parties that will help in controlling the menace of money power.
As matters stand today, no honest person without access to huge resources and money
can win elections. Unless we reform the electoral laws, we cannot have clean and
honest politics and rid the country of the menace of corruption.

Economic Policy and the Controlled Economy

It is a well-known fact that countries which have open and liberal economies have
achieved fast-track economic development and have low level of corruption. India
adopted a socialist model of economic development with the state occupying the
commanding heights, from the time the Five Year Plans were launched in the 1950s.
This model of economic development led to the government doing almost everything
and placing vast discretionary powers in the hands of public officials in what has been
called licence-permit-raj. Various controls led to an economy of shortages. The socialist
policies of the Indira Gandhi Government led to the enactment of the MRTP Act in 1970,
and the FERA in 1973 and a steep hike of the income tax rates with a view to reducing
income disparities. These policies required licences, permits and clearances for setting
up of new industries, expanding the capacity of existing ones, import of capital
equipment and spares and release of foreign exchange. Analysing their impact, S. S.
Gill, a former civil servant, comments.

This regulatory regime gave the government extensive power of patronage, as also of
delay and extortion. And they were fully exploited by the politicians on the pretext of
raising party funds, the bureaucrats had their own share of the loot, and bribery became
a pervasive phenomenon at all levels of the government.

The government had a rethinking about the direction of development and introduced a
new liberalised economic policy in 1991, and this has made a significant impact on the
economic performance of the country. The foreign exchange rate is now aligned to the
market, limiting to a large extent the malpractice of export-import invoicing. The
smuggling of foreign goods, including gold, is largely curbed as it is no longer a
profitable venture. Under the new industrial policy the biggest change has come in the
automobile and durable consumer goods sector and one can buy good quality cars,
two-wheelers, refrigerators, TV, and other gadgets off-the-shelf, satisfying the pent-up
demand of the middle class. With the liberalisation of the telecom and petroleum
sectors, one can get a telephone and domestic cooking gas connection on demand as
against interminable waiting a few years back. With the lifting of controls on distribution
of cement and steel, markets are flooded and one can buy any quantity off-the-shelf and
there has been a spurt in building activities.

If India has now become part of the mainstream global economic system, the credit
should go to the private sector for seizing the opportunity of a liberalised economic
environment.

Bureaucratic Corruption
While we have liberalised the economy, there has been practically no reform in
bureaucracy and public administration to keep pace with the fast-changing economic
scenario. We continue to follow archaic rules and procedures which have built-in
provisions for delay and prevarication giving opportunity to officials to indulge in
corruption and harass the hapless citizens. The Central Excise tariff is so complicated
with a wide array of rates for different items carrying numerous exemptions, that an
officer adminis-tering them can have a field day. The manual of building by-laws of the
Municipal Corporation of Delhi is a confused, intricate and excessively detailed
document running into 350 pages. The complicated rules gives the engineers and the
architect an opportunity to harass citizens who wish to construct houses. S.S. Gill has
given a graphic description of how in Capital city of Delhi, at the heart of the centre of
power, organisations such as the DDA, MCD, Electricity and Police have systematised
corruption and where officials actively abet land grabbing, unauthorised construction,
theft of power and illegal plying of transport vehicles. Departments such as police,
municipal corporations, land records, sales-tax, income-tax, excise and customs are
known to be corrupt and even routine work cannot be done without giving bribe.

There is no accountability on public servants to deliver the public services which the
citizens want. The conduct and disciplinary rules are so porous that no public servant
gets punishment for dereliction of duty and harassment to people.

Big Business, Economic Liberalisation and Corruption

Mega corruption thrives because of a nexus between the big business, politician and
bureaucrat. Transparency International observes:

Business continues to play a very exposed role as the supplier of corrupt payments to
civil servants, members of government and political parties. Kickbacks are actively
solicited, extorted or offered proactively. Irrespective of the coercion involved, the fact
remains that bribery fosters a culture of impunity and repeat corruption, undermines the
functioning of public institutions and fuels a perception that governments and
bureaucracies are up for sale to the highest bidder.

Large infrastructure projects and defence deals with huge public outlays always
presented an opportunity for kickbacks. But post-economic liberalisation the opportunity
of corruption has increased many-fold due to the policies of privatisation, public-private
partnership and globalisation. The privatisation policy of the Civil Aviation Ministry has
led to the passing of lucrative routes to private airlines and this, coupled with huge
orders for purchase of aircraft by Air India, has made the premier national airline
bleeding and sick. The ONGC has given extraordinary concessions and favours to a
Reliance consortium in a production-sharing agreement for exploration of oil and gas
fields. In the name of development, innumerable mineral exploration rights have been
given to mining companies in forest land belonging to tribals, uprooting them from their
natural habitat. Prime agriculture land has been acquired at throwaway prices and given
to big business on the pretext of establishing Special Economic Zones, on which fancy
malls and luxury houses have been built. The 2G scam has exposed in graphic detail
the nexus between the politician, civil servant, business and even the media,
and shows how deep the cancer of corruption has penetrated the highest policy-making
institutions.

Because of ill-defined policies, weak regulatory frame-work and large discretion in the
hands of Ministers and high public officials India is emerging as a basket case of crony
capitalism that may derail the entire economy.

Global Financial Integrity has estimated that out of the illicit flow of $ 462 billion from the
country since 1948, 68 per cent has occurred during the post-reform period of 1991-
2008the annual illicit outflow averaging $ 19 billion in the last five years 2004-08.
Deregulation and trade liberalisation are the main drivers of illicit flow of money abroad.
Roger Baker, Director, Global Financial Integrity, concludes:

What is clear is that, during the post-reform period of 1991-2008, deregulation and trade
liberalisation have accelerated the outflow of illicit money from the Indian economy.
Oppor-tunities for trade mispricing have grown, and expansion of the global shadow
financial system accommodates hot money, particularly in island tax havens. Disguised
corporations, situated in secrecy jurisdictions, enable billions of dollars shifting out of
India to round trip, coming back into short-and long-term invest-ments, often with the
intention of generating unrecorded transfers again in a self-reinforcing cycle. Illicit
outflows drain hard currency reserves and reduce tax collection, harming Indias poor
and widening income gaps.

Multinationals and Bribe

From the time India launched its Five Year Plans and embarked on a policy of industria-
lisation, it had to depend on foreign companies for machinery, equipment and technical
now-how, for its large infrastructure projects, public sector companies and defence
needs. Due to intense international competition and constant need to grow and expand
markets, the MNCs are known to give huge bribes. Due to the complexity of
international business and secrecy in government very few cases come to notice. The
countrywide uproar caused by the Bofors gun and HDW submarine deals, rocked the
Rajiv Gandhi Government and led to its defeat in the elections.

Big-scale bribery and kickbacks are a fact of life in international business. Multinational
corporations are the supply side of grand corruption. The need of the MNCs to enhance
their profitability drives them to seek new markets and new opportunities. Competition
with other international corporations means there is always a search for competitive
advantage and corruption is often seen as an important and necessary method of
enhancing or securing profits. Transparency International Chairman Peter Eigen says:
Our new survey leaves no doubt that large number of multi-national corporations from
the richest nations are pursuing a criminal course to win contracts in the leading
emerging markets of the world.

One of the most blatant and sensational cases of MNCs interfering in the politics of a
host country was highlighted in the case of the ITT, a giant US conglomerate which, in
active collabo-ration with the CIA, engineered the overthrow of the government of
Salavador Allende in Chile in 1973. A duly elected Communist Government of Allende
wanted to undertake large scale nationalisation, particularly copper mines and
telephone, threatening US corporate interests. The ITT paid bribe to the Opposition
leaders and collaborated with the CIA in destabilising the government which eventually
led to a coup and the assassination of Allende.

ElfAquitaine, a state-owned French oil company, was the centre of the scandal during
the 1990s for bribing the dictatorial regimes in West African oil enclaves of Gabon,
Congo-Brazzaville, and Cameroon, all former French colonies, which enabled their
rulers to build power bases on clan-based distribution systems and reinforce their
personal hold on power. Elf expanded its business horizontally in the former USSR and
East European countries, following collapse of communism and opening up of the
economy. It purchased crude oil from the Russian state oil company, entered into oil
exploration contracts with Kazakhstan and Uzbekistan and acquired refining and
distribution network of the East German state company which was being privatised, by
resorting to large scale bribery and kickbacks. When the press exposed the scandal and
it became the subject of a magisterial enquiry, the chief executive of Elf stated during
trial he was just a cog in the institutionalised corruption machine involving the political
and administrative elites of France who profited from an elaborate network of kickback
and bribes well known to insiders.

BAe Systems, the UKs biggest arms company, was alleged to have paid bribes to win
contracts from Saudi Arabia. The Guardian published a report by its team of
investigative journalist that BAe Systems paid British 17 million in cash to key Saudi
politicians for purchase of armsthis included luxury flats in London. Money flowed
from the UK to the tax haven of the British Virgin Islands to Switzerland and onwards.
The Guardian also published allegations that BAe has paid bribes to several countries
for arms purchase including India. The company was allegedly providing prostitutes,
sports car, yachts, first class plane tickets and other inducements. The scandal
prompted SFO (Serious Fraud Office) to launch an investigation. The investigation
created a diplomatic row with Saudi Arabia forcing the government of Tony Blair to step
in and stop the investigation in December 2006.

Large corporates relentless pursuit of profit and capturing markets, even by resorting to
dubious method of paying bribe, should be viewed in the larger context of their role in
national and international economies. The top 200 MNCs account for over 50 per cent
of the worlds industrial output. Their share of revenues and from activities outside their
home countries is approaching 50 per cent. Multinational companies account for two-
thirds of global tradeone-third of global trade is intra-firm. In the US the largest
Fortune 500 companies account for half the countrys GDP. They therefore have great
deal of influence in domestic policies and often dictate it. Celebrated economist J.K.
Gailbraith, in his book, The New Industrial Estate, elucidates how powerful corporations
are able to manipulate the needs and wants of people, determine the price at which a
product is to be sold by creating a monopolistic or oligopolistic market situation, and
maximise their profits. In Economics of Innocent Fraud, Galbraith underlines the role of
corporate bureaucracy which controls it and gives itself rewards and compensation
which verge on larceny. In the US even the public realm, particularly the arms industry
and financial world, is controlled by the private sector. During the 2008 recession, when
some large corporations were facing financial crisis, incurred losses and sacked their
employees, the chief executives and top managements siphoned off huge money as
bonus and compensation payment to themselves. The US economic recession, from
which it has not yet been able to recover, is largely attributed to corporate greed.

Big business and corporates are the main drivers of mega corruption. Due to the inner
dynamics of continuous expansion and growth and intense competition in the
marketplace, they have to willy nilly take recourse to all kind of tactics to expand and
secure orders for their productsincluding bribery, to survive grow and prosper. But
why should public officials accept bribe, when they are paid by the state coffers? Unless
public servants, particularly Ministers and high officials, are honest and men of integrity
and inspired by a sense of duty to serve the public, and refuse to be tempted, it is
difficult to see how bribery can be stopped.

International Convention against Bribery

The conduct of big business and large corporates in meddling with politics, trying to
manipulate economic policies and influencing award of lucrative contracts, particularly in
developing countries, has been a subject of great concern to the international
community. A great outrage was also felt at many unscrupulous rulers and high public
functionaries stealing public money and amassing it in secret accounts abroad. Abacha,
who was the President of Nigeria, is reported to have stolen $ 4 billion, Marcos of the
Philippines $ 5 billion and Suharto of Indonesia close to $ 35 billion. These factors were
instrumental in developing a consensus by the members of the OECD and United
Nations to bring a code of conduct for businesses operating abroad.

The OECD Convention, drawn in 1997, for the first time focuses on the supply side of
the bribery transaction. The 34 OECD member countries and four non-member
countriesArgentina, Brazil, Bulgaria, and South Africahave adopted this
Convention. The OECD Anti-Bribery Convention establishes legally binding standards
to criminalise bribery of foreign public officials in international business transactions and
provides for a host of related measures that make this effective. The Convention
establishes an open-ended, peer-driven monitoring mechanism to ensure the
implementation of the international obligations that countries have taken on under the
Convention.
The United Nations has adopted a Convention Against Corruption (UNCAC) which has
come into force in December 2005. The purposes of this Convention are: (a) to promote
and strengthen measures to prevent and combat corruption more efficiently and
effectively; (b) to promote, facilitate and support international cooperation and technical
assistance in the prevention of and fight against corruption, including in asset
recovery;(c) to promote integrity, accountability and proper management of public affairs
and public property. The provisions of the Convention are legally binding on nations
which ratify it. The Convention introduces a comprehensive set of standards, measures
and rules that all countries can apply in order to strengthen their legal and regulatory
regimes to fight corruption. It calls for preventive measures and the criminalisation of the
most prevalent forms of corruption in both public and private sectors. The Convention
makes a major breakthrough by requiring Member States to return assets obtained
through corruption to the country from which they were stolen. These provisions
introduce a new fundamental principle, as well as a framework for stronger cooperation
between States to prevent and detect corruption and to return the proceeds of
corruption.

In the words of Kofi Annan, the former Secretary-General of the United Nations, the
Convention will send a clear message that the international community is determined to
prevent and control corruption. It will warn the corrupt that betrayal of the public trust will
no longer be tolerated. And it will reaffirm the importance of core values such as
honesty, respect for the rule of law, accountability and transparency in promoting
development and making the world a better place for all.

Although India was an original signatory to the UNCAC, it has ratified the Convention
only in May 2011, after considerable pressure was put on the government. The
Convention can greatly help India fight transnational corruption, money laundering,
crime and black money stacked abroad, as it has provision for asset recovery and
member countries rendering mutual legal assistance towards prosecution of offenders
as well in tracing, freezing and confiscating the proceeds of corruption. But the question
is: has the government the will to fight corruption?.

Part II Tackling the Roots of Corruption

Societal Attitude and Political Leadership

Western countries, such as Denmark, Sweden, New Zealand, the UK, USA, have very
low levels of corruption. On the other hand India has a very high level of corruption. Has
corruption something to do with societal and cultural attitude to corruption? Nobel Prize
winner sociologist Gunnar Myrdal, writing four decades ago, advanced a sociological
reason for corruption. As people have a very weak sense of loyalty to organised society,
anybody in a position of power is likely to exploit it in the interest of himself, his family,
or other social groups to which he has a loyalty. Stronger loyalty to the family, caste,
ethnic, religious and linguistic groups, is in sharp contrast to Western mores and
behaviour and encourages nepotism and moral laxity and results in a soft state with a
low level of social discipline. From the time Myrdal wrote this, things have become much
worse. Politicians have fully exploited the fragmented loyalties in the Indian society
where family, caste and religious affiliation is unabashedly used to garner votes and win
elections. The Nehru-Gandhi is no doubt the most famous dynasty ruling the country,
but the entire political spectrum across the country is dynasticbe it Karunanidhi in
Tamil Nadu or Prakash Singh Badal in Punjab. Patrick French, in his book, IndiaA
Portrait, has analysed the hold of dynastic politics and found to his dismay that a
majority of the so-called young and progressive MPs in the current Lok Sabha are all
sons, nephews or close relatives of well-entrenched political dynasties. Post-Mandal,
caste-based politics helped Laloo Prasad Yadav to catapult to power in Bihar and
Mulayam Singh Yadav and Mayawati in UP. All political parties play communal politics
with consummate skill, with no consideration of its cost to the nation.

The Indian variant of democracy is largely responsible for the mess we are presently
in. Politicians are able to exploit the gullible voters, a majority of whom is illiterate or
semi-literate and poor. Journalist Fareed Zakaria describes Indian democracy as bandit
democracy, since the key features of democracy are missing here. Democracy is not
simply about elections, but it is about fair elections where an honest person without the
backing of money power has a chance to win, it is about the rule of law, it is about
separation and delegation of powers, it is about protection of basic liberties and
constitutional liberalism. Nani Palkivala, the noted jurist, had observed, in one of his
reflective moments, that much of the problem of our country is due to the present
election system and perhaps it was an error to have given the right to vote to everyone,
without educating the voter first.

We cannot blame the Constitution-makers for our present woeswe have failed to
implement the basic vision of the Constitution due to which we have a sham democracy.
The Constitution had envisaged free and compulsory education for every child within
ten years of its existence, so that an enlightened citizenry is created which understands
its rights, duties and responsibilities. The vision of the Constitution-makers was to
secure not only equality, liberty and justice but also fraternity amongst people. Dr B.R.
Ambedkar had observed, in his concluding speech at the Constituent Assembly, that
fraternity means a sense of common brotherhood of all Indianswe must overcome the
evils, such as caste and become a nation in reality. Without fraternity, equality and
liberty will be no deeper than a coat of paints. Post-independence it was the
responsibility of our leadership to create bonds of friendship and harmony amongst
diverse religious, ethnic, and caste groups. Instead, politicians have exploited the
fragmented Indian society, going to the extent of using the legislative measures to
institutionalise it, so as to catapult themselves into power.

We have to devise a system in which only men and women of character and integrity,
who are inspired by a spirit of social service, are elected to Parliament, State
Assemblies and Panchyati Raj institutions. This can come through a massive
programme of education of the entire citizenry, not only making them literate but an
education that builds character, where people understand what is right and wrong, and
set for themselves exemplary conduct in all their dealings.
Economic Model and Consumerism

It is widely believed that during the last four decades there has been a continuous
decline in values and character of the Indian people, which is the root cause for the all-
pervading corruption in society. The general masses, who participated in the freedom
movement, were men of character, lived a spartan life and were willing to make
sacrifices for the larger national good. Does our economic policy have something to do
with the decline in values and increase in corruption? Post-independence we have been
blindly imitating the economic ideology of the West, which is materialist, and where
earning money is considered the primary aim of life, and progress is judged in terms of
economic growth. Economic growth basically means that a nations production and
consumption should keep on increasing, but takes no account of its distributive effect
and whether the benefits of rising income are getting equitably distributed in the society.
The current economic model with implicit faith in the market forces and liberalisation of
foreign trade and investment gives rise to consumerism. The culture of the Western
style consumerism is fast spreading across India. The springing up of luxury villas,
fancy malls, five-star hotels and the rising sale of high-end Mercedes and BMW cars
and other foreign luxury goods are its most visible symbols.

The current model of economic development leads to concentration of wealth by a small

section of the society, allowing them to live a life of luxury while the majority barely
makes the two ends meet. According to Forbes, the number of billionaire in India
doubled to 52 in 2009, their combined net worth reached $ 276 billion or a quarter of the
countrys GDP. Unequal society leads to high levels of status consciousness amongst
the people and they strive for self-esteem through a neurotic spiral of consumption.
People live beyond their means as banks lure them with easy availability of credit cards,
auto loans, and home mortgages. It was consumerism the huge spending binge on
consumer goods and houses, fuelled by credit and mortgages by reckless banksthat
was responsible for the US and West Europes economic meltdown in 2008, and led to
mass unemployment and suffering of the people. Status consciousness, where one
wants to show-off and keep up with Joneses, leads people to make money by hook or
crook, cut corners and indulge in unfair and corrupt practices.

Possessing tonnes of money is no guarantee that people will behave honestly and stay
within the ambit of the law. Ramlingam Raju, the founder of Satyam Computers, who
built a very successful computer business in the country and possessed tens of crores,
committed one of the biggest corporate frauds and diverted the companys funds to
enter the real estate, to make yet more money which ended in a fiasco, and is now
cooling his heels in jail. Raj Rajaratnam, a Colombo-born highly successful hedge fund
founder, whose personal fortune ran into billions, was caught in an inside trading
scandal in the USA for a relatively small sum and is now facing twenty years in jail.
Bernard Madoff, a multi-billionaire American stock-broker, turned his wealth
management business into a massive Ponzi scheme that defrauded thousands of
investors of billions of dollars and has been sentenced to spend the rest of his life in jail.
A perceptive commentator says that the most likely explanation for such deviant
behaviour is that in the culture of the Wall Street, where power counts for everything
and wealth is the greatest measure of success, greed overwhelms risk.

Greed is an inherent human trait. Without an ethical compass and moral standard an
individual can go astray. Modern society extols wealth-makingthere is nothing wrong
with it, if it is earned ethically and within the ambit of the law. But the problem arises
when money-making becomes an addiction for the power it confers, and then the
desire to acquire it becomes limitless. Wealth-worship in society tempts people to live
beyond their means, indulge in a luxurious life-style and use the wrong methods to
make it. It is time society realises that making more and more money and indulging in
the ostentatious life-style cannot be the aim of life.

Indian philosophy from times immemorial has been advocating an ethico-spiritual view
of lifesimple living and high thinking. Mahatma Gandhi had said that there is enough
in the world for everyones needs but not for their greed and advanced a theory of
trusteeship for business. Sri Aurobindo advises:You must neither turn into an ascetic
shrinking from the money power, the means it gives and the object it brings, nor cherish
a basic attachment to them or a spirit of enslaving self-indulgence in their
gratificationAll wealth belongs to the Divine and those who hold it are trustees, not
possessors.

It is time we get our values right if we have to create an honest corruption-free society.

Getting the Values Right

Values set standards and guidelines which govern our behaviour and the responses we
make to life situations. Ancient India was known for high values, which helped it develop
a great culture and civilisation, which was universally admired. Paying tribute to it,
historian A.L. Basham observes that in ancient India, people enjoyed life, passionately
delighting both in the things of the senses and the things of the spirit. India was a
cheerful land, whose people each finding a niche in a complex and slowly evolving
social system, reached a higher level of kindliness and gentleness in their mutual
relationship than any other nation of the antiquity. The Indian civilisation was built on
the foundation of truth, honesty, self-discipline and sacrifice in what is known as dharma
of living. Eminent jurist N.A. Palkivala22 observes:

Our old sages judged the greatness of a State not by the extent of its empire or the size
of its wealth, but by the degree of righteousness and justice which marked the public
administration and the private life of the citizens. Their timeless teaching was that mans
true progress is to be judged by the moral and spiritual standards, and not by material
and physical standards. Sacrifice was far more important than success; and
renunciation was regarded as a crowning achievement. The citizens ranked in society,
not according to wealth or power, but according to the standard of learning, virtue and
character which he had attained.
Indias ancient wisdom is contained in its ancient scriptures such as the Vedas,
Ramayana and Mahabharata. They continue to inspire and guide large sections of the
population even today. Bhagwad Gita contains the essence of the Hindu philosophy
known as Vedanta. Vedanta emphasises the development of the inner personality of the
human being, primacy of spirit over body and mind, self-control, which alone enables
one to lead a virtuous and truthful life. According to Indian philosophy, the human
actions of artha (wealth creation) and kama (enjoyment and pleasure), though perfectly
legitimate, should be within the bonds of dharma. The Upanishad saysten tyakten
bhunjitha ma gridha kasya swid dhanam, that is, enjoy wealth but in a detached manner
and use it for the service of the community.

All the great religions of the worldHinduism, Islam, Christianity, Buddhismteach the
same values. The five key values are: truth (satya), love (prem), righteousness
(dharma), non-violence (ahimsa) and peace (shanti). These are eternal values and act
as a beacon light to guide the behaviour of human beings and do not change with the
flux of time. The goal of all the religions is the sameto live a life of peace, happiness
and self-fulfilment, though different paths may be followed to reach them. A Vedic
saying captures thisekam sad viprah bahudha vadanti, that is, the Truth is one,
sages call it by various names. Bharat Ratna Bhagwan Dass, in his classic study
Essential Unity of All Religions, has portrayed in graphic detail the basic harmony of all
religions. Mahatma Gandhi had observed:

Indeed religion should pervade every one of our actions. Here religion does not mean
sectarianism. It means a belief in an ordered moral government of the universe. It is not
less real because it is unseen. This religion transcends Hinduism, Islam, Christianity,
etc. It does not supersede them. It harmonises them and gives them reality.

Over centuries India has assimilated various religions and cultures with which it came in
contact. Sufism has enriched the mystical dimension of Hinduism. Indians celebrate
Christmas and admire the Christian spirit of service to society. Buddha is considered an
Indian deity and worshipped. Indian music, art, poetry and literature is a rich amalgam
of diverse cultures. India has thus developed a composite culture where various
religious and cultural groups can live in peace, harmony and brother-hood. Great
leaders, such as Raja Rammohan Roy, Swami Dayananda Saraswati, Swami
Vivekananda, Sri Aurbindo, Rabindranath Tagore and Mahatma Gandhi, launched the
Indian renaissance on the basic foundation of Indian culture and religion.

Unfortunately today there is an all-round decline in values and character of the people.
Money has become the new God and people use all kinds of illegitimate means to earn
it, and even commit heinous crimes. Fake drugs are sold and these, instead of curing,
harm and even poison the patient. Milk and food are adulterated causing grievous injury
to the health of the people. Education has become a commodity available to the highest
bidder. Poor in standard, capitation fee-based medical colleges have sprung up, without
medical teachers and equipment, producing half-baked doctors, incapable of treating
any ailment. Well-paid college teachers deliberately neglect classes, so that students
are forced to join coaching classes run by them. These evils, which have permeated
every section of society, cannot be eradicated without changing the values of society
and people imbibing a moral code.

It is only through a well-designed education system that we can build a value-based

society. The first step is to catch the young boys and girls in schools and colleges and
impart to them value education and familiarise them about Indias glorious past and its
ancient wisdom and culture. Blaming the education system for our youngsters not
developing the patriotic feeling and working for the upliftment of the country, Swami
Chinmyananda says: Unless you know the glory of the past, how can you work in the
present and make sacrifices for building a future of the country. Unfortunately the
Indian policy-makers feel that teaching Values tantamount to religious education. This
is based on a misunder-standing of true meaning of secularism. Teaching of different
religious traditions and Indias composite culture does not militate against secularism. It
is important that we give an intensive course of moral and civic education to our
students, particularly at the primary and secondary levels, and lay a solid foundation of
their character. Veteran freedom fighter C. Rajgopalachari had observed:

National character is the key stone on which rests the fate and future of our public
affairs It is the improvement of individual character that goes to make the uplift of
national character which in turn becomes the keystone in the arch of national prosperity.

For national development, we have to do solid work towards inculcation of values in the
entire society. Swami Bhoomananda Tirth has founded a society called the Movement
for Restoration of National Values (MRNV) with E. Sreedharan as its Chairman. The
aim26 is to restore our time-tested national values, so that people, individually and
collectively, find an inner persuasion to be truthful, ethical, patriotic and societal in their
aspirations and goals. We are fortunate in this country, to have many institutions such
as Shri Ramakrishna Mission, Sri Aurobindo Society, Chinmayananda Mission, Satya
Sai Baba Trust who are not only doing wonderful work in promoting values but also
social work and have set up schools, colleges and hospitals. Many Christian missions
and other religious organisations are doing similar social service and have set up
schools, colleges, hospitals and homes for the poor and destitute. There exists a great
reservoir of social capital in the country, which can be tapped to create a society based
on high ideals and moral principles.

The recent campaign against corruption led by Anna Hazare has received massive
support all over the country. A large number of highly committed organisations such as
Common Cause, Parivartan and Lok Satta Party are active participants of this
movement, as also spiritual organisations such as the Art of Living of Sri Sri Ravi
Shankar and Patanjali Yogpith of Baba Ramdev. The movement has forced the
government to make a promise of bringing an empowered Jan Lokpal Act to deal
effectively with cases of corruption.
What the country needs today is a national movement in which our spiritual
organisations, civil society and enlightened citizens all work together to change the
current social, economic and political milieu of the country. Our educational system
should be overhauled to inculcate values and build the character of our young boys and
girls. We should construct a new society, taking inspiration from our spiritual and
cultural heritage. That would be truly launching the second battle of freedom.

Towards a Corruption-Free India

Is it possible to have a corruption-free India? Dr A.P.J. Abdul Kalam, the former

President of India exhorts: Dream, Dream, Dream; dreams transform into thoughts;
And thoughts result in action. We must first have a vision of corruption free India, and
then work tirelessly to achieve it, howsoever insurmountable the task. The battle against
corruption has to be multi-pronged and long drawn. It has to be a combination of good
laws, effective enforcement and, above all, adoption of high moral standards by the
political masters, civil servants as well as citizenry.

1. First, we should have a strong independent anti-corruption institutionJan Lokpal,

which should have powers to investigate, prosecute and award stiff punishment, with all
public servants under its jurisdiction, including the highest in the land. This would act as
an effective deterrent.

2. Second, the election laws should be modified so that only men of integrity, who have
a spirit of social service, are elected to Parliament, Legislative Assemblies and other
electoral offices. One of the main reasons for corruption is the role of money and
muscle-power in our political system, and this needs to be eliminated.
3 The core values of integrity, honesty, objectivity and impartiality, essential for the
functioning of the Civil Services, should be prescribed through an Ethics Code, violation
of which should invite censure and disciplinary action. The UK Civil Services Ethics
could act as a model. The existing disciplinary rules are porous with numerous
loopholes. These should be modified so that quick punishment is given to public
servants committing malfeasance and violation of norms of behaviour and conduct.

4 A large number of laws, rules and procedures of administrative business is outdated,

delays decision-making and is regulatory in nature bearing the imprint of the colonial
legacy. They give opportunity to the corrupt to harass the public. These need to be
modified and made citizen-friendly.

While wideranging political, administrative and legal reforms are required to tackle
corruption, we must understand the foundation on which it rests. The problem is with
our economic model, where money has become the measure of all values and the New
God. We are blindly imitating the materialist philosophy of the West, without
assimilating its good features such as social discipline, the rule of law and a rational
scientific outlook. According to historian Arnold Toynbee, while mankind has made
phenomenal economic progress due to advances of technology which have vastly
increased Mans wealth and power, the morality gap between Mans physical power of
doing evil and his spiritual capacity for coping with this power has yawned wide open as
the mythical jaws of Hell. During the last 5000 years, the widening gap has caused
mankind to inflict on itself grievous disaster. The leaders of the Indian renaissance
understood this and called for transformation of the society based on our ancient
wisdom and values.

Swami Vivekananda reminded us that the national ideals of India are tyag
(renunciation) and sewa (service). Intensify her in those channels and the rest will take
care of itself. Mahatma Gandhi had preached, avoid Seven Deadly Sins: Wealth
without work; Pleasure without conscience; Science without humanity; Knowledge
without character; Politics without principle; Commerce without morality; Worship
without sacrifice. It is time we travel the path shown by our gurus to create a corruption-
free, healthy and happy society- (Mainstream weekly-B P Mathur)
 b. Anti Corruption Laws:

THE PREVENTION OF CORRUPTION ACT, 1988

An Act to consolidate and amend the law relating to the prevention of corruption and for
matters connected therewith.

CHAPTER I PRELIMINARY

2. Definitions.In this Act, unless the context otherwise requires,

(a) election means any election, by whatever means held under any law for the
purpose of selecting members of Parliament or of any Legislature, local authority or
other public authority;

(b) public duty means a duty in the discharge of which the State, the public or the
community at large has an interest; Explanation.In this clause State includes a
corporation established by or under a Central, Provincial or State Act, or an authority or
a body owned or controlled or aided by the Government or a Government company as
defined in section 617 of the Companies Act, 1956 (1 of 1956);

(c) public servant means (i) any person in the service or pay of the Government or
remunerated by the Government by fees or commission for the performance of any
public duty; (ii) any person in the service or pay of a local authority; (iii) any person in
the service or pay of a corporation established by or under a Central, Provincial or State
Act, or an authority or a body owned or controlled or aided by the Government or a
Government company as defined in section 617 of the Companies Act, 1956 (1 of
1956); (iv) any Judge, including any person empowered by law to discharge, whether by
himself or as a member of any body of persons, any adjudicatory functions; (v) any
person authorised by a court of justice to perform any duty, in connection with the
administration of justice, including a liquidator, receiver or commissioner appointed by
such court; (vi) any arbitrator or other person to whom any cause or matter has been
referred for decision or report by court of justice or by a competent public authority; (vii)
any person who holds an office by virtue of which he is empowered to prepare, publish,
maintain or revise an electoral roll or to conduct an election or part of an election; (viii)
any person who holds an office by virtue of which he is authorised or required to
perform any public duty; (ix) any person who is the president, secretary or other office-
bearer of a registered co-operative society engaged in agriculture, industry, trade or
banking, receiving or having received any financial aid from the Central Government or
a State Government or from any corporation established by or under a Central,
Provincial or State Act, or any authority or body owned or controlled or aided by the
Government or a Government company as defined in section 617 of the Companies
Act, 1956 (1 of 1956); (x) any person who is a chairman, member or employee of any
Service Commission or Board, by whatever name called, or a member of any selection
committee appointed by such Commission or Board for the conduct of any examination
or making any selection on behalf of such Commission or Board; (xi) any person who is
a Vice-Chancellor or member of any governing body, professor, reader, lecturer or any
other teacher or employee, by whatever designation called, of any University and any
person whose services have been availed of by a University or any other public
authority in connection with holding or conducting examinations; (xii) any person who is
an office-bearer or an employee of an educational, scientific, social, cultural or other
institution, in whatever manner established, receiving or having received any financial
assistance from the Central Government or any State Government, or local or other
public authority. Explanation 1.Persons falling under any of the above sub-clauses
are public servants, whether appointed by the Government or not. Explanation 2.
Wherever the words public servant occur, they shall be understood of every person
who is in actual possession of the situation of a public servant, whatever legal defect
there may be in his right to hold that situation.

CHAPTER II

APPOINTMENT OF SPECIAL JUDGES

3. Power to appoint special Judges.(1) The Central Government or the State

Government may, by notification in the Official Gazette, appoint as many special Judges
as may be necessary for such area or areas or for such case or group of cases as may
be specified in the notification to try the following offences, namely: (a) any offence
punishable under this Act; and (b) any conspiracy to commit or any attempt to commit or
any abetment of any of the offences specified in clause (a). (2) A person shall not be
qualified for appointment as a special Judge under this Act unless he is or has been a
Sessions Judge or an Additional Sessions Judge or an Assistant Sessions Judge under
the Code of Criminal Procedure, 1973 (2 of 1974).

4. Cases triable by special Judges.(1) Notwithstanding anything contained in the

Code of Criminal Procedure, 1973 (2 of 1974), or in any other law for the time being in
force, the offences specified in sub-section (1) of section 3 shall be tried by special
Judges only. (2) Every offence specified in sub-section (1) of section 3 shall be tried by
the special Judge for the area within which it was committed, or, as the case may be, by
the special Judge appointed for the case, or where there are more special Judges than
one for such area, by such one of them as may be specified in this behalf by the Central
Government. (3) When trying any case, a special Judge may also try any offence, other
than an offence specified in section 3, with which the accused may, under the Code of
Criminal Procedure, 1973 (2 of 1974), be charged at the same trial. (4) Notwithstanding
anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), a special
Judge shall, as far as practicable, hold the trial of an offence on day-to-day basis.
5. Procedure and powers of special Judge.(1) A special Judge may take cognizance
of offences without the accused being committed to him for trial and, in trying the
accused persons, shall follow the procedure prescribed by the Code of Criminal
Procedure, 1973 (2 of 1974), for the trial of warrant cases by Magistrates.

(2) A special Judge may, with a view to obtaining the evidence of any person supposed
to have been directly or indirectly concerned in, or privy to, an offence, tender a pardon
to such person on condition of his making a full and true disclosure of the whole
circumstances within his knowledge relating to the offence and to every other person
concerned, whether as principal or abettor, in the commission thereof and any pardon
so tendered shall, for the purposes of sub-sections (1) to (5) of section 308 of the Code
of Criminal Procedure, 1973 (2 of 1974), be deemed to have been tendered under
section 307 of that Code. (3) Save as provided in sub-section (1) or sub-section (2), the
provisions of the Code of Criminal Procedure, 1973 (2 of 1974), shall, so far as they are
not inconsistent with this Act, apply to the proceedings before a special Judge; and for
the purposes of the said provisions, the Court of the special Judge shall be deemed to
be a Court of Session and the person conducting a prosecution before a special Judge
shall be deemed to be a public prosecutor. (4) In particular and without prejudice to the
generality of the provisions contained in sub-section (3), the provisions of sections 326
and 475 of the Code of Criminal Procedure, 1973 (2 of 1974), shall, so far as may be,
apply to the proceedings before a special Judge and for the purposes of the said
provisions, a special Judge shall be deemed to be a Magistrate. (5) A special Judge
may pass upon any person convicted by him any sentence authorised by law for the
punishment of the offence of which such person is convicted. (6) A special Judge, while
trying an offence punishable under this Act, shall exercise all the powers and functions
exercisable by a District Judge under the Criminal Law Amendment Ordinance, 1944
(Ordinance 38 of 1944).

6. Power to try summarily.(1) Where a special Judge tries any offence specified in
sub-section (1) of section 3, alleged to have been committed by a public servant in
relation to the contravention of any special order referred to in sub-section (1) of section
12A of the Essential Commodities Act, 1955 (10 of 1955) or of an order referred to in
clause (a) of sub-section (2) of that section, then, notwithstanding anything contained in
sub-section (1) of section 5 of this Act or section 260 of the Code of Criminal Procedure,
1973 (2 of 1974), the special Judge shall try the offence in a summary way, and the
provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may
be, apply to such trial: Provided that, in the case of any conviction in a summary trial
under this section, it shall be lawful for the special Judge to pass a sentence of
imprisonment for a term not exceeding one year: Provided further that when at the
commencement of, or in the course of, a summary trial under this section, it appears to
the special Judge that the nature of the case is such that a sentence of imprisonment
for a term exceeding one year may have to be passed or that it is, for any other reason,
undesirable to try the case summarily, the special Judge shall, after hearing the parties,
record an order to that effect and thereafter recall any witnesses who may have been
examined and proceed to hear or re-hear the case in accordance with the procedure
prescribed by the said Code for the trial of warrant cases by Magistrates. (2)
Notwithstanding anything to the contrary contained in this Act or in the Code of Criminal
Procedure, 1973 (2 of 1974), there shall be no appeal by a convicted person in any
case tried summarily under this section in which the special Judge passes a sentence of
imprisonment not exceeding one month, and of fine not exceeding two thousand rupees
whether or not any order under section 452 of the said Code is made in addition to such
sentence, but an appeal shall lie where any sentence in excess of the aforesaid limits is
passed by the special Judge.

CHAPTER III

OFFENCES AND PENALTIES

7. Public servant taking gratification other than legal remuneration in respect of an

official act.Whoever, being, or expecting to be a public servant, accepts or obtains or
agrees to accept or attempts to obtain from any person, for himself or for any other
person, any gratification whatever, other than legal remuneration, as a motive or reward
for doing or forbearing to do any official act or for showing or forbearing to show, in the
exercise of his official functions, favour or disfavour to any person or for rendering or
attempting to render any service or disservice to any person, with the Central
Government or any State Government or Parliament or the Legislature of any State or
with any local authority, corporation or Government company referred to in clause (c) of
section 2, or with any public servant, whether named or otherwise, shall be punishable
with imprisonment which shall be not less than [three years] but which may extend to
[seven years] and shall also be liable to fine. Explanations.(a) Expecting to be a
public servant. If a person not expecting to be in office obtains a gratification by
deceiving others into a belief that he is about to be in office, and that he will then serve
them, be may be guilty of cheating, but he is not guilty of the offence defined in this
section. (b) Gratification. The word gratification is not restricted to pecuniary
gratifications or to gratifications estimable in money. (c) Legal remuneration. The
words legal remuneration are not restricted to remuneration which a public servant can
lawfully demand, but include all remuneration which he is permitted by the Government
or the organisation, which he serves, to accept. (d) A motive or reward for doing. A
person who receives a gratification as a motive or reward for doing what he does not
intend or is not in a position to do, or has not done, comes within this expression. (e)
Where a public servant induces a person erroneously to believe that his influence with
the Government has obtained a title for that person and thus induces that person to give
the public servant, money or any other gratification as a reward for this service, the
public servant has committed an offence under this section.

8. Taking gratification, in order, by corrupt or illegal means, to influence public

servant. Whoever accepts or obtains, or agrees to accept, or attempts to obtain, from
any person, for himself or for any other person, any gratification whatever as a motive or
reward for inducing, by corrupt or illegal means, any public servant, whether named or
otherwise, to do or to forbear to do any official act, or in the exercise of the official
functions of such public servant to show favour or disfavour to any person, or to render
or attempt to render any service or disservice to any person with the Central
Government or any State Government or Parliament or the Legislature of any State or
with any local authority, corporation or Government company referred to in clause (c) of
section 2, or with any public servant, whether named or otherwise, shall be punishable
with imprisonment for a term which shall be not less than 1 [three years] but which may
extend to [seven years] and shall also be liable to fine.

9. Taking gratification, for exercise of personal influence with public servant.Whoever

accepts or obtains or agrees to accept or attempts to obtain, from any person, for
himself or for any other person, any gratification whatever, as a motive or reward for
inducing, by the exercise of personal influence, any public servant whether named or
otherwise to do or to forbear to do any official act, or in the exercise of the official
functions of such public servant to show favour or disfavour to any person, or to render
or attempt to render any service or disservice to any person with the Central
Government or any State Government or Parliament or the Legislature of any State or
with any local authority, corporation or Government company referred to in clause (c) of
section 2, or with any public servant, whether named or otherwise, shall be punishable
with imprisonment for a term which shall be not less than 1 [three years] but which may
extend to [seven years] and shall also be liable to fine.

10. Punishment for abetment by public servant of offences defined in section 8 or 9.

Whoever, being a public servant, in respect of whom either of the offences defined in
section 8 or section 9 is committed, abets the offence, whether or not that offence is
committed in consequence of that abetment, shall be punishable with imprisonment for
a term which shall be not less than six months but which may extend to five years and
shall also be liable to fine.

11. Public servant obtaining valuable thing, without consideration from person
concerned in proceeding or business transacted by such public servant.Whoever,
being a public servant, accepts or obtains or agrees to accept or attempts to obtain for
himself, or for any other person, any valuable thing without consideration, or for a
consideration which he knows to be inadequate, from any person whom he knows to
have been, or to be, or to be likely to be concerned in any proceeding or business
transacted or about to be transacted by such public servant, or having any connection
with the official functions of himself or of any public servant to whom he is subordinate,
or from any person whom he knows to be interested in or related to the person so
concerned, shall be punishable with imprisonment for a term which shall be not less
than six months but which may extend to five years and shall also be liable to fine.

12. Punishment for abetment of offences defined in section 7 or 11.Whoever abets

any offence punishable under section 7 or section 11 whether or not that offence is
committed in consequence of that abetment, shall be punishable with imprisonment for
a term which shall be not less than 1 [three years] but which may extend to 2 [seven
years] and shall also be liable to five.

13. Criminal misconduct by a public servant.(1) A public servant is said to commit the
offence of criminal misconduct, (a) if he habitually accepts or obtains or agrees to
accept or attempts to obtain from any person for himself or for any other person any
gratification other than legal remuneration as a motive or reward such as is mentioned
in section 7; or (b) if he habitually accepts or obtains or agrees to accept or attempts to
obtain for himself or for any other person, any valuable thing without consideration or for
a consideration which he knows to be inadequate from any person whom he knows to
have been, or to be, or to be likely to be concerned in any proceeding or business
transacted or about to be transacted by him, or having any connection with the official
functions of himself or of any public servant to whom he is subordinate, or from any
person whom he knows to be interested in or related to the person so concerned; or (c)
if he dishonestly or fraudulently misappropriates or otherwise converts for his own use
any property entrusted to him or under his control as a public servant or allows any
other person so to do; or (d) if he, (i) by corrupt or illegal means, obtains for himself or
for any other person any valuable thing or pecuniary advantage; or (ii) by abusing his
position as a public servant, obtains for himself or for any other person any valuable
thing or pecuniary advantage; or (iii) while holding office as a public servant, obtains for
any person any valuable thing or pecuniary advantage without any public interest; or (e)
if he or any person on his behalf, is in possession or has, at any time during the period
of his office, been in possession for which the public servant cannot satisfactorily
account, of pecuniary resources or property disproportionate to his known sources of
income. Explanation.For the purposes of this section, known sources of income
means income received from any lawful source and such receipt has been intimated in
accordance with the provisions of any law, rules or orders for the time being applicable
to a public servant. (2) Any public servant who commits criminal misconduct shall be
punishable with imprisonment for a term which shall be not less than 3 [four years] but
which may extend to [ten years] and shall also be liable to fine.

14. Habitual committing of offence under sections 8, 9 and 12.Whoever habitually

commits (a) an offence punishable under section 8 or section 9; or (b) an offence
punishable under section 12, shall be punishable with imprisonment for a term which
shall be not less than 1 [five years] but which may extend to 2 [ten years] and shall also
be liable to fine.

15. Punishment for attempt.Whoever attempts to commit an offence referred to in

clause (c) or clause (d) of sub-section (1) of section 13 shall be punishable with
imprisonment for a term [which shall not be less than two years but which may extend
to five years] and with fine.

16. Matters to be taken into consideration for fixing fine.Where a sentence of fine is
imposed under sub-section (2) of section 13 or section 14, the court in fixing the amount
of the fine shall take into consideration the amount or the value of the property, if any,
which the accused person has obtained by committing the offence or where the
conviction is for an offence referred to in clause (e) of sub-section (1) of section 13, the
pecuniary resources or property referred to in that clause for which the accused person
is unable to account satisfactorily.

CHAPTER IV

INVESTIGATION INTO CASES UNDER THE ACT

17. Persons authorised to investigate.Notwithstanding anything contained in the Code

of Criminal Procedure, 1973 (2 of 1974), no police officer below the rank, (a) in the
case of the Delhi Special Police Establishment, of an Inspector of Police; (b) in the
metropolitan areas of Bombay, Calcutta, Madras and Ahmedabad and in any other
metropolitan area notified as such under sub-section (1) of section 8 of the Code of
Criminal Procedure, 1973 (2 of 1974), of an Assistant Commissioner of Police; (c)
elsewhere, of a Deputy Superintendent of Police or a police officer of equivalent rank,
shall investigate any offence punishable under this Act without the order of a
Metropolitan Magistrate or a Magistrate of the first class, as the case may be, or make
any arrest therefor without a warrant: Provided that if a police officer not below the rank
of an Inspector of Police is authorised by the State Government in this behalf by general
or special order, he may also investigate any such offence without the order of a
Metropolitan Magistrate or a Magistrate of the first class, as the case may be, or make
arrest therefor without a warrant: Provided further that an offence referred to in clause
(e) of sub-section (1) of section 13 shall not be investigated without the order of a police
officer not below the rank of a Superintendent of Police.

18. Power to inspect bankers books.If from information received or otherwise, a

police officer has reason to suspect the commission of an offence which he is
empowered to investigate under section 17 and considers that for the purpose of
investigation or inquiry into such offence, it is necessary to inspect any bankers books,
then, notwithstanding anything contained in any law for the time being in force, he may
inspect any bankers books in so far as they relate to the accounts of the persons
suspected to have committed that offence or of any other person suspected to be
holding money on behalf of such person, and take or cause to be taken certified copies
of the relevant entries therefrom, and the bank concerned shall be bound to assist the
police officer in the exercise of his powers under this section: Provided that no power
under this section in relation to the accounts of any person shall be exercised by a
police officer below the rank of a Superintendent of Police, unless he is specially
authorised in this behalf by a police officer of or above the rank of a Superintendent of
Police. Explanation.In this section, the expressions bank and bankers books shall
have the meanings respectively assigned to them in the Bankers Books Evidence Act,
1891 (18 of 1891).

CHAPTER V

SANCTION FOR PROSECUTION AND OTHER MISCELLANEOUS PROVISIONS

19. Previous sanction necessary for prosecution.(1) No court shall take cognizance of
an offence punishable under sections 7, 10, 11, 13 and 15 alleged to have been
committed by a public servant, except with the previous sanction 1 [save as otherwise
provided in the Lokpal and Lokayuktas Act, 2013 (1 of 2014)] (a) in the case of a
person who is employed in connection with the affairs of the Union and is not removable
from his office save by or with the sanction of the Central Government, of that
Government; (b) in the case of a person who is employed in connection with the affairs
of a State and is not removable from his office save by or with the sanction of the State
Government, of that Government; (c) in the case of any other person, of the authority
competent to remove him from his office. (2) Where for any reason whatsoever any
doubt arises as to whether the previous sanction as required under sub-section (1)
should be given by the Central Government or the State Government or any other
authority, such sanction shall be given by that Government or authority which would
have been competent to remove the public servant from his office at the time when the
offence was alleged to have been committed. (3) Notwithstanding anything contained in
the Code of Criminal Procedure, 1973 (2 of 1974), (a) no finding, sentence or order
passed by a special Judge shall be reversed or altered by a Court in appeal,
confirmation or revision on the ground of the absence of, or any error, omission or
irregularity in, the sanction required under sub-section (1), unless in the opinion of that
court, a failure of justice has in fact been occasioned thereby; (b) no court shall stay the
proceedings under this Act on the ground of any error, omission or irregularity in the
sanction granted by the authority, unless it is satisfied that such error, omission or
irregularity has resulted in a failure of justice; (c) no court shall stay the proceedings
under this Act on any other ground and no court shall exercise the powers of revision in
relation to any interlocutory order passed in any inquiry, trial, appeal or other
proceedings. (4) In determining under sub-section (3) whether the absence of, or any
error, omission or irregularity in, such sanction has occasioned or resulted in a failure of
justice the court shall have regard to the fact whether the objection could and should
have been raised at any earlier stage in the proceedings. Explanation.For the
purposes of this section, (a) error includes competency of the authority to grant
sanction; (b) a sanction required for prosecution includes reference to any requirement
that the prosecution shall be at the instance of a specified authority or with the sanction
of a specified person or any requirement of a similar nature.

20. Presumption where public servant accepts gratification other than legal
remuneration.(1) Where, in any trial of an offence punishable under section 7 or
section 11 or clause (a) or clause (b) of sub-section (1) of section 13 it is proved that an
accused person has accepted or obtained or has agreed to accept or attempted to
obtain for himself, or for any other person, any gratification (other than legal
remuneration) or any valuable thing from any person, it shall be presumed, unless the
contrary is proved that he accepted or obtained or agreed to accept or attempted to
obtain that gratification or that valuable thing, as the case may be, as a motive or
reward such as is mentioned in section 7 or, as the case may be, without consideration
or for a consideration which he knows to be inadequate. (2) Where in any trial of an
offence punishable under section 12 or under clause (b) of section 14, it is proved that
any gratification (other than legal remuneration) or any valuable thing has been given or
offered to be given or attempted to be given by an accused person, it shall be
presumed, unless the contrary is proved, that he gave or offered to give or attempted to
give that gratification or that valuable thing, as the case may be, as a motive or reward
such as is mentioned in section 7, or, as the case may be, without consideration or for a
consideration which he knows to be inadequate. (3) Notwithstanding anything contained
in sub-sections (1) and (2), the court may decline to draw the presumption referred to in
either of the said sub-sections, if the gratification or thing aforesaid is, in its opinion, so
trivial that no inference of corruption may fairly be drawn.

21. Accused person to be a competent witness.Any person charged with an offence

punishable under this Act, shall be a competent witness for the defence and may give
evidence on oath in disproof of the charges made against him or any person charged
together with him at the same trial: Provided that (a) he shall not be called as a
witness except at his own request; (b) his failure to give evidence shall not be made the
subject of any comment by the prosecution or give rise to any presumption against
himself or any person charged together with him at the same trial; (c) he shall not be
asked, and if asked shall not be required to answer, any question tending to show that
he has committed or been convicted of any offence other than the offence with which he
is charged, or is of bad character, unless (i) the proof that he has committed or been
convicted of such offence is admissible evidence to show that he is guilty of the offence
with which he is charged, or (ii) he has personally or by his pleader asked any question
of any witness for the prosecution with a view to establish his own good character, or
has given evidence of his good character, or the nature or conduct of the defence is
such as to involve imputations on the character of the prosecutor or of any witness for
the prosecution, or (iii) he has given evidence against any other person charged with
the same offence.

22. The Code of Criminal Procedure, 1973 to apply subject to certain modifications.
The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), shall in their
application to any proceeding in relation to an offence punishable under this Act have
effect as if, (a) in sub-section (1) of section 243, for the words The accused shall
then be called upon, the words The accused shall then be required to give in writing at
once or within such time as the Court may allow, a list of the persons (if any) whom he
proposes to examine as his witnesses and of the documents (if any) on which he
proposes to rely and he shall then be called upon had been substituted; (b) in sub-
section (2) of section 309, after the third proviso, the following proviso had been
inserted, namely: Provided also that the proceeding shall not be adjourned or
postponed merely on the ground that an application under section 397 has been made
by a party to the proceeding.; (c) after sub-section (2) of section 317, the following sub-
section had been inserted, namely: (3) Notwithstanding anything contained in sub-
section (1) or sub-section (2), the Judge may, if he thinks fit and for reasons to be
recorded by him, proceed with inquiry or trial in the absence of the accused or his
pleader and record the evidence of any witness subject to the right of the accused to
recall the witness for cross-examination.; (d) in sub-section (1) of section 397, before
the Explanation, the following proviso had been inserted, namely : Provided that
where the powers under this section are exercised by a Court on an application made
by a party to such proceedings, the Court shall not ordinarily call for the record of the
proceedings: (a) without giving the other party an opportunity of showing cause why
the record should not be called for; or (b) if it is satisfied that an examination of the
record of the proceedings may be made from the certified copies..

23. Particulars in a charge in relation to an offence under section 13 (1) (c).

Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of
1974), when an accused is charged with an offence under clause (c) of sub-section (1)
of section 13, it shall be sufficient to describe in the charge the property in respect of
which the offence is alleged to have been committed and the dates between which the
offence is alleged to have been committed, without specifying particular items or exact
dates, and the charge so framed shall be deemed to be a charge of one offence within
the meaning of section 219 of the said Code: Provided that the time included between
the first and last of such dates shall not exceed one year.

24. Statement by bribe giver not to subject him to prosecution.Notwithstanding

anything contained in any law for the time being in force, a statement made by a person
in any proceeding against a public servant for an offence under sections 7 to 11 or
under section 13 or section 15, that he offered or agreed to offer any gratification (other
than legal remuneration) or any valuable thing to the public servant, shall not subject
such person to a prosecution under section 12.

25. Military, Naval and Air Force or other law not to be affected.(1) Nothing in this Act
shall affect the jurisdiction exercisable by, or the procedure applicable to, any court or
other authority under the Army Act, 1950 (45 of 1950), the Air Force Act, 1950 (46 of
1950), the Navy Act, 1957 (62 of 1957), the Border Security Force Act, 1968 (47 of
1968), the Coast Guard Act, 1978 (30 of 1978) and the National Security Guard Act,
1986 (47 of 1986). (2) For the removal of doubts, it is hereby declared that for the
purposes of any such law as is referred to in sub-section (1), the court of a special
Judge shall be deemed to be a court of ordinary criminal justice.

26. Special Judges appointed under Act 46 of 1952 to be special Judges appointed
under this Act.Every special Judge appointed under the Criminal Law Amendment
Act, 1952, for any area or areas and is holding office on the commencement of this Act
shall be deemed to be a special Judge appointed under section 3 of this Act for that
area or areas and, accordingly, on and from such commencement, every such Judge
shall continue to deal with all the proceedings pending before him on such
commencement in accordance with the provisions of this Act.

27. Appeal and revision.Subject to the provisions of this Act, the High Court may
exercise, so far as they may be applicable, all the powers of appeal and revision
conferred by the Code of Criminal Procedure, 1973 (2 of 1974) on a High Court as if the
court of the special Judge were a court of Session trying cases within the local limits of
the High Court.

28. Act to be in addition to any other law.The provisions of this Act shall be in addition
to, and not in derogation of, any other law for the time being in force, and nothing
contained herein shall exempt any public servant from any proceeding which might,
apart from this Act, be instituted against him.
UNIT-IV: Investigation and Prosecution:

a. Central Vigilance Commission (CVC)

The Central Vigilance Commission (CVC) was established in 1964, as an apex body for
exercising general superintendence and control over vigilance administration, through
the Government of India Resolution of 11.2.1964. The main mandate of the
Commission was based on the report of the Committee on Prevention of Corruption,
popularly known as the Santhanam Committee. The establishment of the Commission
was considered essential for evolving and applying common standards in deciding
cases involving lack of probity and integrity in administration. The Resolution
empowered the CVC to undertake inquiry into any transaction in which a public servant
is suspected or alleged to have acted for an improper purpose or in a corrupt manner
irrespective of his or her status. Through subsequent ordinances and legislations the
Government has added to the functions and powers of the Commission. Subsequent to
the directions of Honble Supreme Court in the judgement of the Writ Petition filed in
public interest by Shri Vineet Narain and others in Jain Hawala Case, the Government
promulgated an Ordinance in 1998. The Ordinance of 1998 conferred statutory status to
the CVC and the powers to exercise superintendence over functioning of the Delhi
Special Police Establishment, and also to review the progress of the investigations
pertaining to alleged offences under the Prevention of Corruption Act, 1988 conducted
by them. In 1998 the Government introduced the CVC Bill in the Lok Sabha in order to
replace the Ordinance, though it was not successful. The Bill was re-introduced in 1999
and remained with the Parliament till September 2003, when it became an Act after
being duly passed in both the Houses of Parliament and with the Presidents assent.
The provisions of the Act include inquiries into offences alleged to have been committed
by certain categories of public servants of the Central Government; corporations
established by or under any central Act; government companies; societies; and local
authorities owned or controlled by the Central Government; and for matters connected
therewith or incidental thereto. To give effect to the provisions of the Act of 2003, the
Commission exercises all powers and functions entrusted to it under the Government of
India Resolution No.24/7/64-AVD dated 11.2.1964, which are not inconsistent with this
Act.

Functions and powers of the Central Vigilance Commission

Under the Central Vigilance Commission Act, 2003

Exercise superintendence over the functioning of the Delhi Special Police

Establishment (CBI) insofar as it relates to the investigation of offences under the
Prevention of Corruption Act, 1988; or an offence under the Cr.PC for certain
categories of public servants section 8(1)(a);
 Give directions to the Delhi Special Police Establishment (CBI) for
superintendence insofar as it relates to the investigation of offences under the
Prevention of Corruption Act, 1988 section 8(1)(b);
To inquire or cause an inquiry or investigation to be made on a reference by the
Central Government section 8(1)(c);
To inquire or cause an inquiry or investigation to be made into any complaint
received against any official belonging to such category of officials specified in sub-
section 2 of Section 8 of the CVC Act, 2003 section 8(1)(d);
Review the progress of investigations conducted by the DSPE into offences
alleged to have been committed under the Prevention of Corruption Act, 1988 or an
offence under the Cr.PC section (8)(1)(e);
Review the progress of the applications pending with the competent authorities for
sanction of prosecution under the Prevention of Corruption Act, 1988 section
8(1)(f);
Tender advice to the Central Government and its organizations on such matters as
may be referred to it by them section 8(1) (g);
Exercise superintendence over the vigilance administrations of the various Central
Government Ministries, Departments and Organizations of the Central Government
section 8(1)(h);
Shall have all the powers of a Civil court while conducting any inquiry section 11;
Respond to Central Government on mandatory consultation with the Commission
before making any rules or regulations governing the vigilance or disciplinary
matters relating to the persons appointed to the public services and posts in
connection with the affairs of the Union or to members of the All India Services
section 19.
The Central Vigilance Commissioner (CVC) is the Chairperson and the Vigilance
Commissioners (Members) of the Committee, on whose recommendations, the
Central Government appoints the Director of Enforcement section 25.
The Committee concerned with the appointment of the Director of Enforcement is
also empowered to recommend, after consultation with the Director of Enforcement
appointment of officers to the posts of the level of Deputy Director and above in the
Directorate of Enforcement section 25;
The Central Vigilance Commissioner (CVC) is also the Chairperson and the
Vigilance Commissioners (Members) of the Committee empowered to recommend
after consultation with Director (CBI), appointment of officers to the post of the level
of SP and above except Director and also recommend the extension or curtailment
of tenure of such officers in the DSPE (CBI) - Section 26 and Section 4C of DSPE
Act, 1946.
 b. Central Bureau of Investigation (CBI):

The Central Bureau of Investigation (CBI) is the domestic security agency of India.
The CBI is overseen by the Ministry of Personnel, Public Grievances and Pensions of
the Federal government, headed by a Cabinet Minister who reports directly to the Prime
Minister.
According to Supreme Court of India, the CBI has been criticized for being a
"caged parrot speaking in its master's voice", due to its excessive political
interference irrespective of which party happened to be in power at the time.
Special Police Establishment (SPE)
The Bureau of Investigation braces its origins to the Special Police Establishment,
is Central Government Police force, which was set up in 1941 by the government.
The functions of the SPE were to investigate bribery and corruption in transactions with
the War and Supply Department of India, set up during World War II with its
headquarters in Lahore. The Superintendent of the War Department and the SPE was
Khan Bahadur Qurban Ali Khan, who later became governor of the North West Frontier
Province at the creation of Pakistan. The first legal advisor of the War Department
was Rai Sahib Karam Chand Jain. After the end of the war, there was a continued need
for a central governmental agency to investigate bribery and corruption by central-
government employees. Sahib Karam Chand Jain remained its legal advisor when the
department was transferred to the Home Department by the 1946 Delhi Special Police
Establishment Act].
This is DSPE's scope was enlarged to cover all departments of the Government of
India. Its jurisdiction extended to the Union Territories, and could be further extended to
the states with the consent of the state governments involved. Sardar Patel, first Deputy
Prime Minister of free India and head of the Home Department, desired to weed out
corruption in erstwhile princely states such as Jodhpur, Rewa and Tonk. Patel directed
Legal Advisor Karam Chand Jain to monitor criminal proceedings against the dewans
and chief ministers of those states.
Th DSPE acquired its popular current name, Central Bureau of Investigation (CBI),
through a Home Ministry resolution dated 1.4.1963.
CBI takes shape
The CBI established a reputation as India's foremost investigative agency with the
resources for complicated cases, and it was requested to assist the investigation of
crimes such as murder, kidnapping and terrorism. The Supreme Court and a number of
high courts in the country also began assigning such investigations to the CBI on the
basis of petitions filed by aggrieved parties. In 1987, the CBI was divided into two
divisions: the Anti-Corruption Division and the Special Crimes Division.
D. P. Kohli
The founding director of the CBI was D. P. Kohli, who held the office from 1 April 1963
to 31 May 1968. Before this, Kohli was Inspector-general of police for the Special Police
Establishment from 1955 to 1963 and held law-enforcement positions in Madhya
Bharat (as chief of police), Uttar Pradesh and local central-government offices. For
distinguished service, Kohli was awarded the Padma Bhushan in 1967.
Kohli saw in the Special Police Establishment the potential to growing into a National
Investigative Agency. He nurtured the organisation during his long career as inspector
general and director and laid the foundation on which the agency grew.

Organisational structure-The CBI is headed by a Director, an IPS officer with a rank

of Director General of Police . The director is selected based on the CVC Act 2003, and
has a two-year term. Other ranks in the CBI which may be staffed by the IRS and
the IPS are Special Director, Additional Director, Joint Director, Deputy Inspector
General of Police, Senior Superintendent of Police, Superintendent of Police, Additional
Superintendent of Police, Deputy Superintendent of Police. Inspector, Sub-
Inspector, Assistant Sub-Inspector, Head constable, Constable which are recruited
through SSC or through deputation from Police and Income Tax Department.

Selection committee-The amended Delhi Special Police Establishment Act empowers a

committee to appoint the director of CBI. The committee consists the following people:

Prime Minister chairperson

Leader of Opposition member

Chief Justice of India or a Supreme Court Judge recommended by the Chief

Justice member
When making recommendations, the committee considers the views of the outgoing
director.
Above Selection committee was constituted under The Lokpal and Lokayuktas Act,
2013. Before this central vigilance commissioner, under CVC act, had this power.
NDA government, on 25 November 2014, moved an amendment bill to do away with the
requirement of quorum in high-profile committee while recommending the names, for
the post of director CBI, to the central government by introducing the clause "no
appointment of a (CBI) director shall be invalid merely by reason of any vacancy or
absence of members in the panel". and to replace the LOP with Leader of single largest
opposition party or pre-election coalition as at present there is no Leader of opposition
in the Loksabha.
Infrastructure-CBI headquarters is a 186 crore (US$29 million), state-of-the-art 11-
story building in New Delhi, housing all branches of the agency. The 7,000-square-
metre (75,000 sq ft) building is equipped with a modern communications system, an
advanced record-maintenance system, storage space, computerised access control and
an additional facility for new technology. Interrogation rooms, cells, dormitories and
conference halls are provided. The building has a staff cafeteria with a capacity of 500,
men's and women's gyms, a terrace garden, and bi-level basement parking for 470
vehicles. Advanced fire-control and power-backup systems are provided, in addition to a
press briefing room and media lounge.
The CBI Academy in Ghaziabad, Uttar Pradesh (east of Delhi) began in 1996. It is
about 40 kilometres (25 mi) from the New Delhi railway station and about 65 km (40 mi)
from Indira Gandhi International Airport. The 26.5-acre (10.7 ha) campus, with fields
and plantations, houses the administrative, academic, hostel and residential buildings.
Before the academy was built a small training centre at Lok Nayak Bhawan, New Delhi,
conducted short-term in-service courses. The CBI then relied on state police-training
institutions and the Sardar Vallabhbhai Patel National Police Academy in Hyderabad for
basic training courses for deputy superintendents of police, sub-inspectors and
constables.
The Academy accommodates the training needs of all CBI ranks. Facilities for
specialised courses are also made available to the officials of the state police, central
police organisations (CPOs), public-sector vigilance organisations, bank and
government departments and the Indian Armed Forces.

Jurisdiction, powers and restrictions- The legal powers of investigation of the CBI are
derived from the DSPE Act 1946, which confers powers, duties, privileges and liabilities
on the Delhi Special Police Establishment (CBI) and officers of the Union Territories.
The central government may extend to any area (except Union Territories) the powers
and jurisdiction of the CBI for investigation, subject to the consent of the government of
the concerned state. Members of the CBI at or above the rank of sub-inspector may be
considered officers in charge of police stations. Under the act, the CBI can investigate
only with notification by the central government.
Relationship with state police
Maintaining law and order is a state responsibility as "police" is a State subject, and the
jurisdiction to investigate crime lies with the state police exclusively . The CBI being a
Union subject may investigate:

Offences against central-government employees, or concerning affairs of the central

government and employees of central public-sector undertakings and public-sector
banks
Cases involving the financial interests of the central government
Breaches of central laws enforceable by the Government of India
Major fraud or embezzlement; multi-state organised crime
 Multi-agency or international cases
High Courts and the Supreme Court
The High Courts and the Supreme Court have the jurisdiction to order a CBI
investigation into an offence alleged to have been committed in a state without the
state's consent, according to a five-judge constitutional bench of the Supreme Court (in
Civil Appeals 6249 and 6250 of 2001) on 17 Feb 2010. The bench ruled:
Being the protectors of civil liberties of the citizens, this Court and the High Courts have
not only the power and jurisdiction but also an obligation to protect the fundamental
rights, guaranteed by Part III in general and under Article 21 of the Constitution in
particular, zealously and vigilantly.

Five-judge constitutional bench of the Supreme Court of India,

The court clarified this is an extraordinary power which must be exercised sparingly,
cautiously and only in exceptional situations

Right to Information (RTI)-CBI is exempted from the provisions of the Right to

Information Act. This exemption was granted by the government on 9 June 2011 (with
similar exemptions to the National Investigating Agency (NIA), the Directorate General
of Income Tax Investigation and the National Intelligence Grid (Natgrid)) on the basis of
national security. It was criticized by the Central Information Commission and RTI
activists, who said the blanket exemption violated the letter and intent of the RTI
Act. The exemption was upheld in Madras High Court.

Controversy and criticism

Corruption
Because of the CBI's political overtones, it has been exposed by former officials such as
Joginder Singh and B. R. Lall (director and joint director, respectively) as engaging in
nepotism, wrongful prosecution and corruption. In Lall's book, Who Owns CBI, he
details how investigations are manipulated and derailed. Corruption within the
organization has been revealed in information obtained under the RTI Act, and RTI
activist Krishnanand Tripathi has alleged harassment from the CBI to save itself from
exposure via RTI.
Political interference
Normally, cases assigned to the CBI are sensitive and of national importance. It is
standard practice for state police departments to register cases under its jurisdiction; if
necessary, the central government may transfer a case to the CBI. The agency has
been criticised for its mishandling of several scams. It has also been criticized for
dragging its feet investigating prominent politicians, such as P. V. Narasimha
Rao, Jayalalithaa, Lalu Prasad Yadav, Mayawati and Mulayam Singh Yadav; this tactic
leads to their acquittal or non-prosecution.
Bofors scandal
In January 2006 it was discovered that the CBI had quietly unfrozen bank accounts
belonging to Italian businessman Ottavio Quattrocchi, one of those accused in the
1986 Boforsscandal which tainted the government of Rajiv Gandhi. The CBI was
responsible for the inquiry into the Bofors case. Associates of then-prime minister Rajiv
Gandhi were linked to alleged payoffs made during the mid-1980s by Swedish arms firm
AB Bofors, with US$40 million in kickbacks moved from Britain and Panama to secret
Swiss banks. The 410 howitzers purchased in the US$1,300 million arms sale were
reported to be inferior to those offered by a French competitor.
The CBI, which unfroze 21 crore (US$3.3 million) in a London bank in accounts held
by Bofors, accused Quattrocchi and his wife Maria in 2006 but facilitated his travel by
asking Interpol to take him off its wanted list on 29 April 2009. After communications
from the CBI, Interpol withdrew the red corner notice on Quattrocchi.
Hawala scandal
A 1991 arrest of militants in Kashmir led to a raid on hawala brokers, revealing evidence
of large-scale payments to national politicians. The Jain hawala case encompassed
former Union ministers Ajit Kumar Panja and P. Shiv Shankar, former Uttar Pradesh
governor Motilal Vora, Bharatiya Janata Party leader Yashwant Sinha. The 20
defendants were discharged by Special Judge V. B. Gupta in the 650-million case,
heard in New Delhi.
The judge ruled that there was no prima facie evidence against the accused which
could be converted into legal evidence. Those freed included Bharatiya Janata Party
president L. K. Advani; former Union ministers V. C. Shukla, Arjun Singh, Madhavrao
Scindia, N. D. Tiwari and R. K. Dhawan, and former Delhi chief minister Madan Lal
Khurana. In 1997 a ruling by late Chief Justice of India J. S. Verma listed about two
dozen guidelines which, if followed, would have ensured the independence of the
investigating agency. Sixteen years later, successive governments circumvent the
guidelines and treat the CBI as another wing of the government. Although the
prosecution was prompted by a public-interest petition, the cases concluded with no
convictions. In Vineet Narain & Othrs v Union of India AIR 1996 SC 3386, the Supreme
Court ruled that the Central Vigilance Commission should have a supervisory role over
the CBI.
Priyadarshini Mattoo murder case
In this case Santosh Kumar Singh, the alleged murderer of a 25-year-old law student,
was acquitted for what the judge called "deliberate inaction" by the investigating team.
The accused was the son of a high-ranking officer in the Indian Police Service, the
reason for the CBI's involvement. The 1999 judgment noted that "the influence of the
father of the accused has been there".
Embarrassed by the judgment, CBI Director R. K. Raghavan appointed two special
directors (P. C. Sharma and Gopal Achari) to study the judgement. The CBI appealed
the verdict in Delhi High Court in 2000, and the court issued a warrant for the accused.
The CBI applied for an early hearing in July 2006; in October the High Court found
Singh guilty of rape and murder, sentencing him to death.
Sister Abhaya
This case concerns the 27 March 1992 death of a nun who was found in a water well in
the Saint Pius X convent hostel in Kottayam, Kerala. Five CBI investigations have failed
to yield any suspects.
Sohrabuddin case
The CBI has been accused of supporting the ruling Congress Party against its
opposition, the BJP. The CBI is investigating the Sohrabuddin case in Gujarat; Geeta
Johri, also investigating the case, claimed that the CBI is pressuring her to falsely
implicate former Gujarat minister Amit Shah.
Sant Singh Chatwal case
Sant Singh Chatwal was a suspect in CBI records for 14 years. The agency had filed
two charge sheets, sent letters rogatory abroad and sent a team to the United States to
imprison Chatwal and his wife from 25 February 1997. On 30 May 2007 and 10 August
2008 former CBI directors Vijay Shankar and Ashwani Kumar, respectively, signed no-
challenge orders on the imprisonment. Later, it was decided not to appeal their release.
This closed a case of bank fraud in which Chatwal had been embroiled for over a
decade. Along with four others, Chatwal was charged with being part of a "criminal
conspiracy" to defraud the Bank of Indias New York branch of 28.32
crore (US$4.4 million). Four charges were filed by the CBI, with Chatwal named a
defendant in two. The other two trials are still in progress. RTI applicant Krishnanand
Tripathi was denied access to public information concerning the closed cases.
The Central Information Commission later ordered the CBI to disclose the information;
however, the CBI is exempt from the RTI Act (see above). Chatwal is a recipient of the
Padma Bhushan.
Malankara Varghese murder case[edit]
This case concerns the 5 December 2002 death of T. M. Varghese (also known as
Malankara Varghese), a member of the Malankara Orthodox Church managing
committee and a timber merchant. Varghese Thekkekara, a priest and manager of the
Angamali diocese of the rival Jacobite Syrian Christian Church (part of the Syriac
Orthodox Church), was charged with murder and conspiracy on 9 May 2010.
Thekkekara was not arrested after he was charged, for which the CBI was criticised by
the Kerala High Court and the media.
Bhopal gas tragedy
The CBI was publicly seen as ineffective in trying the 1984 Bhopal disaster case.
Former CBI joint director B. R. Lall has said that he was asked to remain soft on
extradition for Union Carbide CEO Warren Anderson[32] and drop the charges (which
included culpable homicide). Those accused received two-year sentences.
2G spectrum scam
The UPA government has been accused of allocating 2G spectrum to corporations at
very low prices through corrupt and illegal means. The Supreme Court cited the CBI
many times for its tardiness in the investigations;[34][35] only after the court began
monitoring its investigations were high-profile arrests made.
Indian coal allocation scam
This is a political scandal concerning the Indian government's allocation of the nation's
coal deposits to private companies by Prime Minister Manmohan Singh, which cost the
government 10,673.03 billion (US$170 billion). CBI director Ranjit Sinha submitted an
affidavit in the Supreme Court that the coal-scam status report prepared by the agency
was shared with Congress Party law minister Ashwani Kumar "as desired by him" and
with secretary-level officers from the prime ministers office (PMO) and the coal ministry
before presenting it to the court.

Autonomy- Demanding independent investigations, the CBI said that although it

deferred to the government's authority in non-corruption cases the agency felt that
sufficient financial and administrative powers (including a minimum three-year tenure to
ensure "functional autonomy") were required by the director.
"As such, it is necessary that the director, CBI, should be vested with ex-officio powers
of the Secretary to the Government of India, reporting directly to the minister, without
having to go through the DoPT", the agency said, adding that financial powers were not
enough and it wanted a separate budget allocation.[40]
Some form of autonomy has been granted by the Supreme Court of India to CBI when it
held that CBI can prosecute senior bureaucrats without central governments
permission. Indian Supreme Court also held that Section 6A of DSPE Act is
unconstitutional.

Constitutional status
Guwahati High Court had given a verdict on November 6, 2013, that CBI is
unconstitutional and does not hold a legal status. However, the Supreme Court of India
stayed this verdict when challenged by the central government .Some legal experts
believe that the ultimate solution for Indian government is to formulate a law for CBI as
sooner or later the Supreme Court may hold the constitution of CBI unconstitutional.
 c. Criminal Investigation Department (CID):

The Crime Investigation Department (CID) is the investigation and intelligence wing
of the Indian State Police.

Formation and organization

The CID was created by the British Government in 1902, based on the
recommendations of the Police Commission. At the entrance of the CID office at
Gokhale Marg, Lucknow, there is a portrait of Rai Bahadur Pandit Shambhu Nath,
King's Police Medalist (KPM) and Member of British Empire (MBE) with a
caption"Father of Indian CID" In 1929, the CID was split into Special Branch, CID
and the Crime Branch (CB-CID).
CID branches
At present, the CID has several branches which work from state to state. These
branches include:

CB- CID
Anti-Human Trafficking & Missing Persons Cell
Anti-Narcotics Cell
Finger Print Bureau
CID
Anti-Terrorism wing

Crime Branch CID

CB-CID is a special wing in the CID headed by the Additional Director General of Police
(ADGP) and assisted by the Inspector General of Police (IGP). This branch investigates
serious crimes including riots, forgery, counterfeiting and cases entrusted to CB-CID by
the state government or the High Court